Nifty Outlook and Trend for 18th Apr 2019

Medium Term Trend: ↑(Up)

Market update: Nifty had a very strong day today. It opened @ 11750 and went on to touch 11810 levels before closing at 11790 up 100+ points.

 

Nifty today registered a new high above 11760 levels and even crossed 11800 levels. This shouldn't come as a surprise to regular reader of this blog. We have been saying since last 2-3 days ( ever since Nifty failed to break below 11550 levels) that "even though Nifty upmove is appearing stretched there is a likelihood of Nifty attempting another shot at lifetime high and probably even crossing it". Today we got to see exactly that.

 

The entire fall from 11750 was looking like a corrective move and yesterday the downward trendline ( which was keeping the prices down) was broken on the upside on daily charts. We had changed the market trend to 'Up' last week on Thursday when it became clear that 11550 is not going to be broken even after 6-7 days of trying. Also, since last 2 days Nifty has been posting higher high and higher lows on daily chart ( which is a sign of strength). Today again we have another higher high and higher low.

 

So now that we have a new high in place, does it mean markets can continue to move up from here? Well the upmove can stretch a little bit more from here but keep in mind this entire move is still stretched (appears overbought and some amount of negative divergences has also surfaced today) and there is a possibility of a strong correction from here but as long the price chart does not show weakness it will be premature to assume that upside is done.

 

We had also been mentioning that entire move from lows of 10K levels shouldn't cross more than 300% time of previous move but now we have spent more than 300% time already and that means the entire rise from10K is not a corrective move of  previous fall (11750-10K) but a new leg of the existing pattern. This does change a lot of wave counts for long term (but nothing that should impact immediate or near term movement of Nifty). Will try to post new wave counts soon. 

Coming back to the near term movement, the Prices can reverse from these levels or continue to climb higher so the best strategy in such scenario is to keep holding longs with a strict stop loss. Once the correction or a trend reversal begins, the move could be pretty sharp trapping traders on wrong side hence trading on long side with a strict stop loss is recommended.

Current week is just a 3 day week and next one is expiry week, so expect lots of choppy moves going forward. Keep an eye on VIX, it has already crossed 21 which is sign and indication that high volatility days could be coming our way soon.

Happy Trading!

Nifty Outlook and Trend for 16th Apr 2019

Medium Term Trend: ↑(Up)

Market update: Nifty  opened slightly in +ve territory and traded in a narrow band between 11650-700 before closing at 11690 levels, up 50 points.

 

We had mentioned on Friday that since Nifty failed to break below 11550 decisively, chances are it may make another move on the upside and it will be confirmed on break above 11700-11720 levels. Even though Nifty failed to cross above 11700 levels it gave a another positive close and another higher top higher low candle was posted on daily charts which is definitely a sign of strength for now.

 

Nifty has been moving in a downward sloping channel for last 7-8 days and the upper trendline/resistance line (which was keeping Nifty down) was broken on hourly charts on Friday. Today the same was broken on the daily chart as well. So just to reiterate, unless Nifty is making some kind of failure or truncated pattern , chances are it may make another dash towards new time high and may be cross it as well (how far it will go or whether it will sustain there or not is something we need to analyse later).

 

Overall for now, our view remains same. Nifty's current move is overstretched which may reverse suddenly and without warning but as long as the trend remains up and Nifty is trading in the bullish zone , there are chances that this move will continue for now on the upside.

 

Happy Trading!

 

 

 

 

 

Nifty Outlook and Trend for 15th Apr 2019

Short/Near Term Trend: ↑(Up)
Medium Term Trend: ↑(Up)

Market update: Nifty opened slightly up at 11620 levels and remained range bound for most of the day. It again failed to break below 11550 levels and some buying interest was seen in second half which pushed it again over 11650 levels. It closed 45 points up at 11640 levels.

Nifty is continuously trying to break below 11550 levels sine last 6-7 days and is not succeeding. If  this move from 11760 to 11550 was an impulsive move we should have seen a sharp fall by now. Markets inability to break below 11550 levels in spite of repeated attempts is probably suggesting that the up move which started from 11600 levels is not yet done with.

We had mentioned previously that Nifty need to break below 11320 by coming Friday to start a new down trend .Let alone 11320 Nifty didn't even break below 11550 levels. Infact today nifty posted a higher high and higher low on the daily charts ( protected yesterdays low and closed above yesterdays day high). Today on hourly & 30 mins charts Nifty has given a close above the recent downward sloping trendline so probably the falling channel markets have been trading in since last 6-7 days is now broken. For now we have again changed the short term trend to 'UP' Nifty needs to break above 11700-11720  levels to validate this.

On weekly charts Nifty has posted hanging man sort of a pattern which is suggesting some buying interest at lower levels however its important for Nifty to conquer previous week high which is also the all time high ( 11760).

Overall, like we said previously, even though Nifty's entire move from 10600 level is appearing overstretched, theres a likelihood of Nifty spending some more time here attempting another shot at lifetime high. Now this probability has become even stronger after seeing Nifty consolidate in 11550-11700 range in last 6-7 days. Hence for now the bias remains on the upside but keep in mind it may reverse/change without warning and that too with a violent sharp movement hence always keep a tight SL for all longs.

Happy Trading!

Nifty Outlook and Trend for 12th Apr 2019

Short/Near Term Trend: ↓(Down)
Medium Term Trend: ↑(Up)

Market update: Nifty had a sluggish day today and after moving in tight range of 11550-600 it closed at 11595 up 10 odd points.

Yesterday we had mentioned that Nifty even though is slipping daily, the fall is too slow and looking like a corrective move. We needed a strong bearish move to change the medium term to down however what we had was another flattish sort of a day.

Nifty needs to move below 11320 by Friday to signal start of a fresh down move . Now since it is more than 250 points away with just one trading day remaining chances of Nifty taking another shot at lifetimes high has increased a little ( unless Nifty makes a truncated/failure top below 11760).

On the upside we need a move above 11670-11700 levels to confirm that last 6 days corrective move is over now. Overall the medium market trend remains up/bullish but the near term trend remains down (in contradiction to each other) hence the sideways movement continues in Nifty.

On daily charts the fall from 11760-11550 has generated positive divergence on the charts. Daily RSI is not at all supporting this down move ( but like we saw previously both negative and positive divergence can continue for long. It just a indicator but not a conclusive one).

In nutshell, not much change in view, Nifty continues to trade around at a level where there is strong probability of markets making a near term top but the current price movement suggesting that probably some more upside movement is still remaining and Nifty might move a little more on the upside before top is formed. 11320 on the downside and 11700 on the upside remains critical levels to watch out for now.

Happy Trading!


 

Nifty Outlook and Trend for 11th Apr 2019

Short/Near Term Trend: ↓(Down)
Medium Term Trend: ↑(Up)

Market update: Nifty opened flattish inspite of an overnight fall in US stocks but failed to add points above opening price and once again slipped to sub 11600 levels. It closed down 80 points at 11584.

Yesterday we had mentioned that rally for now looks back on track and as long 11600 is held there are chances of another spike up. However nifty again slipped back below 11600 proving us wrong and changing near term trend to 'down' once again. Overall market trend has once again turned neutral ( i.e, both near and medium term trends are in contradiction to each other).

There is just a small possibility that last 5 days fall from 11760 to 11574 has completed a contracting triangle correction. If its the case we should see a sharp spike above 11670-11700 once again and if that sustains Nifty can attempt another move up towards new high. However if weakness persists than Nifty can see even lower levels but it will take couple of very strong bearish session to change the medium term to 'down'.

Overall we have been saying that there is a likelihood of market making a intermediate/short term top at 11760 but the problem is its been 5 days already and Nifty has not given any meaningful down move ( and the last few days fall is looking like a corrective move for now) which raises the question if another up leg is pending for this rally. The move from 11320 to 11760 had taken 7 days so we still have 2 more days to go and if its actually a trend reversal then Nifty should beak below 11320 in next 2 days (coming Friday). But this level is more than 250 points away hence we say we need big downside movement or a strong bearish move in next 2 days.

In nutshell, If Nifty keep slipping then keep an eye on 11320-11350 levels, any meaningful fall can only be expected once this level is taken out on the other hand if Nifty again trades above 11670 levels followed with strength above 11700 then a strong possibility of a fresh 52 week high on Nifty is there.

Market has moved a lot in last 2 months so there is always a risk for a big correction/down or a trend reversal which can come suddenly and without warning hence all longs needs to be covered with a proper SL

Happy Trading!.

Nifty Outlook and Trend for 10th Apr 2019

Near Term Trend: ↑ (Up) 

Market update: Nifty opened below 11600 levels but failed to break below 11550 levels. Encouraged by lack of selling pressure, bulls pulled Nifty smartly and it closed at 11670 levels ( up 70 points).

Yesterday we had mentioned that bulls need a strong push soon else there is a chance of bears taking over. We did see a smart pull today and though Nifty did not cross above 11700 levels there are few indicators ( including  the fact that entire fall from 11760 has too many overlapping waves) which are probably suggesting that sideway or neutral trend we have been witnessing for last 5-6 days is over for now and probably Nifty is ready for another thrust or move on the up side.

Overall this remains a corrective move and the criteria mentioned in previous post ( High PE ratio etc) still stand however the most important indicator ( I.e, price) is again pointing to another move on the upside. Market has already spent 4 days after hitting 11760 and we are only less than 100 points below it. So if it was actually a bear move, then we should have seen a strong move on the downside by now ( which didn't happen). So for now we believe trend has once again changed to 'UP' and probably Nifty would wants to give another shot at hitting new all time highs.

If markets again break below 11600 and then goes on to break below 11550 levels then the immediate trend will again change. 

Happy Trading!

Nifty Outlook and Trend for 9th Apr 2019

Near Term Trend:↔(Neutral/Upswing maturing) 

Market update: Nifty opened at 11700 but quickly dropped to 11650 levels within seconds after opening and even dropped to 11550 levels intraday. It finally closed at 11600 down 60 points.

In our previous post we had mentioned "if Nifty fails to cross 11710-11720 levels then 11550 levels can be tested again and if that happens it will be a lower top lower high kind of a scenario which can invite further selling". That's exactly how the markets played out today, it failed to cross 11700 levels and dropped below 11560 levels. Now on intraday charts we have a lower top lower high type of a pattern in place and Bulls now need a very strong push immediately else there is a chance that bears will get active (after a long time).

Overall trend still remains neutral ( we have been marking the trend as ' neutral' since last 4-5 days and clearly Nifty indeed can be seen trading flattish or sideways since last 4-5 days). For any bullish scenario to play out, bulls need Nifty to cross above 11700 levels if that happens trend will again change back to 'up' however we need further (infact lot more) weakness to change the trend to 'down'. Its entirely possible that this sideway movement is just a temp correction post which Nifty will resume its uptrend or at the same time its also possible that for now an intermediate top has been hit (at 11760). VIX also shot up 10% and closed above 20 which might indicate that markets are probably bracing themselves for high volatility in near term.

There are plenty of technical indicators which continue to suggest a likelihood ( just a possibility mind you) that an intermediate/short term top has been put in place already. We have been mentioning these indicators in previous posts but to sum up:

• Entire pull back from 10K levels has consumed around 280% of time of previous fall ( max time allowed as per neo-wave is around 300%)
• Number of trading session from lows of 10k are coming to be 108 (which matches exactly with the previous cycle ( 9950 to 11750)
• On weekly charts, markets posted a spinning top last week
• Since the uptrend started from 10k nifty has posted 4 gaps (daily chart) and the 4th got filled last Wednesday and turned into an exhaustion gap
• PE ratio touched 29 ( which is highest for last 10 year or so)
• Last 9-10 days rally (from 11320 till 11760) is carrying a very strong negative divergence

Now apart from these, there are plenty of other things which are indicating a possible top but the key indicator which is 'price' is still in bullish mode and as long as Nifty is strong on price charts it can continue to soar higher and higher ( all other things can be ignored). But that doesn't mean that one should get complacent or overexcited after seeing the 1000 point rally. This week is very important and probably will set a clear trend for times to come.

Happy Trading!