Nifty Outlook and Trend for 16th May 2019

Medium Term Trend: ↓Down ( up above 11640)

Weakness Continues: After a one day upmove markets returned to its bearish mode. Whole day it moved wildly between 11200 and 11300 and finally broke below 11200 in last half hour and closed at 11057 levels 65 points down.

After falling for 9 consecutive days markets yesterdays gave signs of some stabilization however today again the main trend returned. This raises the question if the bounce from 11100 was merely a technical bounce which got over today and markets are ready to move down again.
 
Like we mentioned yesterday, for immediate basis we need a move above 11300 levels for bullish options and a move below 11170-50 levels for bearish options to open again. Today markets have tested both ends and closed exactly at the lower end of the range which proves that the level mentioned by us are working and are actually important. If markets sustains below it tomorrow then probably 11100 will be tested again and this time the chances of markets breaking below it will be higher (so we don't recommend going long now at 11100 even for momentum or short term trading)

The way VIX is moving up everyday is pretty interesting too. Today it almost touched 29 (last time when VIX touched 29 it was way back in 2015 and at that time Nifty was around 7500-8000 levels).

For now the fall from 11850 is indeed looking like an impulsive move and Nifty need an equally stronger move on the upside to negate it so far the pullback we have seen is too short and looking like a corrective move ( but its too early to judge and we need to see more evidence).

Overall same view stands for now. Keep an eye on 11300 and 11150 levels ( and 11100 below that) for the immediate term movement as break on either side can lead to accelerated movement in Nifty

Happy Trading!

 

Nifty Outlook and Trend for 15th May 2019

Medium Term Trend: ↓Down ( up above 11640)

Market update: Volatility to the core: Nifty moved more than 400 points intraday today. It rose to 11300 levels from lows of 11110 and then dropped to 11175 and from there again rose to 11250 levels. It finally broke the losing streak and on 10th day Nifty put on 70 odd points and closed 11220 levels.

 

Yesterday we had mentioned that 11100-11060 levels is the final support for market and if market drops to around 11100 levels then some amount of momentum or short term buying can be initiated with a strict SL of 11040 levels. Nifty made a day low of 11108 levels and rose almost 200 points from there in intraday itself so there you had some intraday points to be made in Nifty.

 

We had also mentioned that markets can move in a line for max 9-10 days and after completing 9 days of straight fall yesterday the chances of a technical pull back was always there. But the problem is that pull back has come from pretty low levels ( 11100) and it may not take nifty very far now (but that remains to be seen) Nifty rose with a good momentum today and the good thing is there was no negative divergences on short term charts.

 

Now we need to carefully observe how this pull back is shaping up in the days to come. The way markets reacted from 11300 levels suggests that market is going to face stiff resistance at every rise hence one needs to be watchful. at the same time because of such a long losing streak there is always a chance of bounce back.

 

For an immediate basis 11300 and 11170 levels become critical pivot points for Nifty. If 11300-320 level is crossed and sustain for a bit then we can expect another 70-100 point rally ( even more) on the other hand if 11170-50 level is broken then we can test 11100 levels again and if its broken that we are looking at much lower levels in a hurry.

 

VIX is increasing and continue to hover around 27 ( which is pretty high). So in a nutshell we need to see how the current move up is shaping up before predicting the next nifty move. For any bullish option to materialize, Nifty should conquer 11400-450 levels soon and start trading above it for some time. On the other hand if this pull back ends before that then probably its just a pullback and market will start its downward journey once again.

 

Happy Trading

  

 

 

 

Nifty Outlook and Trend for 14th May 2019

Medium Term Trend: ↓Down ( up above 11640)

Market update: 9th Day & counting- Nifty fell yet again and its going worse day by day. It fell by another 130 points to close at 11148 levels.

 

Bear sentiments continue to rule and are getting stronger by the day. Seems like markets are now factoring in a weak BJP govt at center. However today markets have completed 9th straight day of fall ( which is nearing a record streak) but the problem market is now facing is that after falling for so much even a pullback wont be able to push it up much higher.

 

11200-220 was a key support zone for markets and today for a brief moment it touched 11220 and moved to 11275 levels but a sharp reversal from there pushed Nifty below 11200 and once it broke there was a free fall all the way to 11130 levels in a matter of minutes.

 

Now the next key level ( and its the last support level) is at 11060-11110 range. This was the previous swing high of Nifty and also the break out point of this rally hence should offer some support(again to which extent that remains to be seen). if this level is taken out then even the long term trend line will change to down. Seeing how the markets have been behaving in last few days its a very strong possibility now.

 

At the time of writing this post Dow future is down by almost 500 points, now since last couple of days dow is recovering from its day low and putting up a smart recovery however it will be difficult to do the same 3rd day in a row. In case we have a bad day in Dow tonite and global markets again open weak tomorrow then Nifty probably will again open in red. If Nifty opens down but hold on to 11100 levels or opening lows then some amount of buying ( purely momentum) can be done in 11060-11100 range ( keeping a strict SL of 11040).

 

On the upside Nifty is likely to face a very stiff resistance in 11350-11400 range now and further gains are expected once 11400 level is taken out now.

 

Just to count few positive, daily RSI has touched 30 and generated a positive divergence on the chart, similarly a positive divergence is also seen on hourly charts (but remember divergences on chart can continue for a long time). Nifty OI continue to remain around 1.7crore which is pretty low and it didn't add any open interest even today.

 

For now keep an eye on 11060-11100 level which is the last support for this entire move and if we do see any bounce or pull back then we need to observe if Nifty is able to take out 11350-11400 zone.

 

Happy Trading!

Nifty Outlook and Trend for 13th May 2019

Medium Term Trend: ↓Down ( up above 11640)

Market update: 8th day and counting- Nifty fell yet again and closed down 20 odd points at 11280 levels. Actual close was around 11256 ( yesterdays low)

Bearish sentiments continues in Nifty and it keep falling. Prospect of BJP not getting full majority (satta market is projecting around 240 seats for NDA) along with weak global markets might be impacting sentiments for the immediate term. However sentiments cannot govern markets for too long so it will be interesting to see if Nifty continue to stay weak next week as well.

Most technical parameters remains on the bearish side and because of some sideways consolidation today, the short term indicators are not as oversold as they were yesterday. However market cannot continue to fall continuously, historically we have seen markets moving in one direction for max 9-10 days in row and now we have completed 8 days so a bounce back is definitely on cards in next 1-2 days. But the question is how far the bounce back will stretch and whether it will sustain there or not.

Situation has suddenly turned gloomy from euphoric. Few days back everyone was talking about 12K+ levels now suddenly in matter of 3-4 days skepticism is in the air and many analyst have declared that top is done for the year at 11850 levels and markets are headed towards 10500 and 10K. It might be true, not denying but in the midst of all this destruction and chaos there are still couple of things which are still positive ( even after the carnage we have seen).

Firstly, just look at the daily RSI, its sitting at 35. when was the last time RSI touched 35? answer is in March when Nifty was @10600. Continuous fall in RSI from here is only going to create some strong +ve divergences on daily charts.

Secondly, Nifty OI. Its abysmally low at 1.7 crores and in last few days it has lost a lot of open interest which suggest existing longs have been cut ( instead of new shorts being added). 1.7 is pretty low and indicate that the positions in F&O is pretty light and people are not leveraged at all. Historically speaking all major falls have been observed when everyone is heavily leveraged in the markets.

Now I am not suggesting that one should go and buy this market, offcourse not, all I am saying is not everything is gloomy and for bulls there is still some glimmer of hope left. For any bullish positions to emerge, as a first step, nifty should go on and cross 11550 in next week and start spending some time there. So if there is a pullback next week it should stretch atleast to 11550-11600 levels, if it fizzle out before that and market reverses again from lets say 11400-11450 or even 11500 levels then probably the last glimmer of hope for bulls would die too.

  

Happy Trading 

Nifty Outlook and Trend for 10th May 2019

Medium Term Trend: ↓Down ( up above 11640) 

Market update: Nifty continued with its bearish trend ( 7th day in a row) and dropped to 11250 levels before closing at 11301 (down 55 points).

We had mentioned yesterday that Nifty has a support around 11350-375 ( yesterdays low/close area) and if its taken out then we are headed straight to 11220 levels. Nifty made a low of 11250 levels before giving a small bounce of around 100 points but it couldn't sustain it and again dropped 50 points from there.

Market trend remains down and all technical indicators on most time frames have now turned negative or bearish. Having said this markets have now reached an oversold territory and given the fact that markets have been falling from last 7 days, some amount of short covering or a pullback cannot be ruled out.

Nifty has some good support at 11220 levels and today it came very near to it . At the time of writing this post, Dow is down by a whopping 400 points so probably Nifty is going to open again in red tomorrow.

So nothing much to add, Market remains in a strong bear grip but a tad oversold so shorting around current levels is not recommended. One should wait for a pullback and short only when pullback gives sign of reversing. Keep an eye of 11220-11200 levels for immediate support.


Happy Trading!

Nifty Outlook and Trend for 9th May 2019

Medium Term Trend: ↓Down ( up above 11720) 

Market update: Nifty had another bad session (6th in row) where it dropped more than 100 points. It touched a low of 11350 and closed at 11360. Down 130 odd points

We had mentioned yesterday that Nifty needed to hold 11446-485 levels to maintain the trend on the upside, however today its broken conclusively hence the trend is changed to down. Previously Trend was marked as up when Nifty had crossed 11K levels in first week of March. Trend has now changed (to down) after almost 2 months now.

Even though the market trend is down now , Nifty is looking oversold on hourly charts ( RSI touched 20 intraday) hence some amount of consolidation or pull backs can be expected before nifty start moving down again.

If we assume that the top is now done at 11860 levels then there are few critical levels to watch out for. First support is there at 11350-11375 which is also nearing todays low and is 38.2% retracement level of the previous move if 11350-75 is also taken out then we are heading straight to 11200-11220 levels. There is a possibility that Nifty has broken a H&S pattern ( neckline at 11550)  and the bearish implication of this pattern can take Nifty to 11350-11200 levels as well ( which matches with the above levels).

For any bullish scenario to emerge, Nifty Needs to conquer the huge gap down that was created 3 days back (11640-11700) only a close above 11700 levels can and will change the trend back to 'up'.

In a nutshell, though trend is down , one should not be in a hurry to short at current levels because of oversold conditions (Also today is the 6th consecutive day of fall) wait for a pullback first and sell only when pull back ends and markets start moving down again.

VIX continues to rise and is sitting at 26 (which is the highest level of last 3 years) hence huge swings can always be expected.

Happy Trading!