Nifty Outlook and Trend for 12th Jun 2019

Medium Term Trend:  ↑UP (down below 11550)

Nifty consolidates: Nifty opened again at 11950 and it moved between 11900 & 12K levels and finally closed at 11965 up 40 odd points.

Nifty today ( yet again) posted another doji, its opening and close price is almost same and has long upper (towards 12k) and lower ( towards 11900) shadows. After posting 2 consecutive Dojis, market are giving indications that its still indecisive and there are chances that the upmove we are seeing from 10770 levels is just a pull back and market can go and test 11800 level once again.

Yesterday we had mentioned that Nifty needs a strong close above 11970 levels, though it did break the level intraday but the manner it was broken was lacking conviction and the close has come below 11970 too hence caution should be maintained even now & also keep in mind that 11975 is the 61.8% retracement level of the entire fall from 12103 to 11770.

Since today was another Doji, the resistance moves higher to 12K now. For immediate level the range becomes 11870 & 12K and a break of these levels might push Nifty further in that direction. Nifty OI continues to hover around 1.9crores ( which is not heavy but not light either).

Global market continue to push higher & Dow put up another 100 point rally (5th consecutive one) and at the time of writing this post, the Dow future is again trading up 150 points so this definitely goes in the favour of bulls.

For bullish scenario to emerge we need a strong push above 12K levels and alternatively break of 11870-50 levels will fuel bearish sentiments and might push Nifty lower.


Happy Trading!                                                   

Nifty Outlook and Trend for 11th Jun 2019

Medium Term Trend:  ↑UP (down below 11550)

Pullback continues: Nifty opened strong at 11950 but couldn't sustain at higher levels and drifted down. Some support at 11880 levels pushed Nifty back at 11900+ and it closed at 11920 up 50 points.

Previously we had mentioned that the bounce which had come on Friday was not looking strong and Nifty needed a strong push above 11950 levels to confirm that correction is over. Bulls had the right idea today in the morning when Nifty opened around 11950 but it failed to sustain much above it and lost steam soon after opening infact Nifty traded whole day below its opening prices ( which is not a bullish indication). At one stage ( just below the closing hours) Nifty had turned almost  flat too. Hence for now we continue to advise caution at current levels and believe that this could just be a pull back which could push back to 11800 levels once again. 11800 has been tested quite a few times already and has weakened considerably so there are chances that it might not hold ( if tested again).

Having said this Market remains in uptrend and unless 11550-75 is taken out, we don't expect to see any major correction or fall in the markets. For short term though its possible that we could see some more weakness.Nifty had posted a 'hanging man' candle in previous session and today it has posted a perfect 'Doji'. Its opening and close are almost same with higher and lower shadow. This is indicating that market participants are lacking conviction and being indecisive for now.

Global markets continue to remain strong and Dow is putting up gains relentlessly ( now its just 3% below its all time high). Dow is also facing a crucial resistance at 26K levels and needs to see if it continues to move higher above 26K levels as well ( if that happens that will be a +ve sign for sure).

Overall no change in our views still, Nifty needs a strong push and close above 11970 ( todays high) to pull Nifty higher towards new all time high on the other hands break of 11870 could mean re-test of 11800 levels and if that doesn't hold then further weakness is likely.

Happy Trading!

Nifty Outlook and Trend for 10th Jun 2019

Medium Term Trend:  ↑UP (down below 11550)

Day of relief: Nifty opened flat and immediately started moving down, it broke below 11800 levels and made a low of 11770 before giving some pullback. It closed at 11870 levels up 25 points.

We had mentioned yesterday that if Nifty breaks below 11780-820 then weakness is likely to continue for now. Though Nifty broke below 11800 levels it was momentarily and bounced back immediately. So now that Nifty has taken support at 11800 and bounced back, can we assume that bottom is in place and correction we are seeing since last 2-3 days is over and Nifty is ready to bounce back to 12k levels again? Well it is possible but the bounce we have seen from 11800 levels is looking more like a consolidation & doesn't look very strong (till now). There is a possibility that this just a temp pause before Nifty start moving down &11800 is tested again in next week. For bullish scenario to materialize Nifty should conquer 11930-950 levels soon (which ideally should have been done today). Unless market makes a strong close above 11930-950 levels the chances of market slipping down again remains.

Nifty open OI stands at 1.85L shares which is on lighter side ( but not as light as it was when markets had touched 11100 before elections) and today it lost 8 lac shares. Losing OI on a day when markets have bounced back is probably an indication of some bit of short covering by traders around 11800 levels. Also looking at weekly charts of Nifty, this is the third week in a row where Nifty has posted a Doji type of candle with long upper body ( which is indicating continuous supply near 12k levels). Also the current week candle has higher high and lower low than previous week candle (like a bearish engulfing pattern) and the weekly close is lower than last week too.

There is no significant divergence with RSI on hourly charts and RSI seems to be moving in line with Nifty.Global markets have consistently making big strides since last 2-3 days with DJIA recovering almost 4% from its recent low. Need to see if it can manage the same momentum in next week too.

In summary, market overall trend remains up however until Nifty start making strong close above 11920-950 levels. There is a possibility of some more weakness in near term. However if weakness continues and nifty goes on to break 11500 levels then overall view will change as well.

Happy Trading!

Nifty Outlook and Trend for 7th Jun 2019

Medium Term Trend:  ↑UP (down below 11550)

Day of weakness: Nifty opened flat and kept trading south inspite of Dow putting up 700+ points and in last 2 days and RBI cutting interest rates which was in line with market expectations. Nifty closed at 11845 levels down 175 points.

We had mentioned in previous post that Nifty's inability to close above 12040 is a bit of downer for bulls and if 12K levels breaks then we can test 11850-900 levels again. Nifty today opened flat and broke below 12K in first 30 minutes itself. Failure to move above 12K levels inspite of RBI cutting interest rates invited more weakness and selling and squaring off of longs pushed Nifty all the way back to 11850 levels today itself.

Now that Nifty has touched 11840-50 levels, its important to observe if attempts to take support at 11780-11820 levels as breach of these levels could invite further weakness in near term. Key point to note about todays fall is that it was very measured, was steady and consistent ( & not a panic selling). Usually when there is a panic selling there is always a chance of a sharp bounce back but when the selling is measured and controlled the chances of market giving further weakness increases.

We had also mentioned that divergence between DOW & Nifty has increased in last few days and while Dow is 5-6% down from its all time high, Nifty is trading above it and as we move forward both indices should catch up (either Dow should move up or Nifty moves down). In last 2 days Dow moved 3% up while Nifty has moved 2% down so a gap of ~5% is filled already between them. Going forward too we need to keep an eye on how both indices are progressing.

In summary, we need to see if market takes support near 11800 levels (especially near last Fridays low). If it does so then strong chances of reclaiming 12K levels again is there however it it doesn't hold then like we mentioned above, the chances are that this dowemove or weakness might persists for few more days. However keep in mind that market trend remains up (as long as 11500 holds) and any fall from  here could be an excellent buying opportunity (but dont try to catch a falling knife, let mkt stabilise first, give signs that correction is over and then only go long) .

Happy Trading!