Nifty Analysis, Outlook and Trend for 27th Aug 2019

Medium Term Trend: ↓ Down (Changes to Up above 11220)

Pullback Continues: Nifty opened strongly above 10900 but the weak global markets pulled it all the way to down 10750 before buying support once again pushed it back to 10900 and then to 11K levels. It finally closed at 11060 levels, up 230 points.

We had been mentioning a possibility of Nifty hitting some kind of bottom at 10650 and todays upmove goes a step further in strengthening our theory. A gapup opening was always expected today but the sellout in global markets ( led by US) muddied the water a little. Ideally speaking we would have preferred seeing a 'runaway' kind of gap today, where market opened strong and kept on moving up. The intraday ( in the first hour itself) fall from 10950 to 10750 has disturbed the pattern a little and a further fall towards 10800-750 is possible ( however the chances of happening so don't look so great).

Nifty has to sustain 11K levels and if it does that and goes on to break above 11100 & 11220 then we can safely assume that downside is done for the time being and market has opened another leg on the upside. Nifty might consolidate a bit around 11100-11500 levels before breaking towards higher level but more and more indicators are now pointing towards a break on the upside.

For now keep an eye of 1095-11K levels as this becomes a critical level for short term support and 11175-11220 on the upside above which medium term trend for Nifty will change to 'UP'.

Happy Trading!

Nifty Analysis, Outlook and Trend for 26th Aug 2019

Medium Term Trend: ↓ Down (Changes to Up above 11220)

Sharp Pullback: Nifty opened below 10700 levels and created a panic like situation and dropped to 10650 levels however markets made a smart recovery and Nifty rose almost 200 points to 10850 levels. It closed at 10830 up 90 points.

Yesterday we had mentioned that inspite of a massive 200 points decline there is a possibility that markets might try to make a bottom around these area. The way markets have traded today does indicate that probably bottom was done around 10650 for near term. Previously we were saying the same thing when Nifty made a low of 10780 however market decided to make one more low below that but doesn't change the broader picture.  Its impossible to predict with pinpoint accuracy the exact low or time when the low is or will be made by the markets so if not 10780 then 10650 is good area to make a bottom too.

We also mentioned that we are reading the fall from 12103 as just a correction which is in its last leg and near completion now it may stretch by 100-200 points or by 5-6 trading days ( again difficult to predict the exact point) but we can see with reasonable surety that probably its near maturity now. The way markets have behaved today raises a strong probability that bottom was made today for near  term ( we should get a clear indication in next 2-3 days).

We also mentioned how daily RSI was not supporting this down move and even the time cyle wise the down move is living on borrowed time. Weekly RSI is hovering around 33-34 ( a level which is rarely seen and that too around major bottom levels).

FM has come out with a stimulus package for the markets and most probably markets will open with a gapup on Monday and if the gapup is sustained and markets go on to cross 11100 then the chances of 10650 being the near term bottom will increase further.

If our chart reading is correct and the overeall pattern is developing the way we are seeing then I would like stick my neck out and say ( with full responsibility) that there is a strong chance of markets seeing a minimum 1500-2000 point rally from the low it made today. Ofcourse it will take time ( could be 2-4 months or more) but there is a strong possibility that we will see higher ( read much higher levels) levels than where we are today. Sentiments on the street might be negative and most people are bearish right now but we don't see any major fall commencing from these levels.

Happy Trading!




 

Nifty Analysis, Outlook and Trend for 23rd Aug 2019

Medium Term Trend: ↓ Down (Changes to Up above 11220)

Weakness to the Fore: Nifty opened below 11900 and kept sliding down through out the day. It made a low of 11700 levels and closed at 10741, down a whopping 180 points.

We had been mentioning that markets may have hit a short term bottom around 10780 and its possible to see a move on the upside from these levels. Though Nifty moved to around 11150-75 it failed to sustained there and today even broke below 10780 (prior low) and made a new low. So 10780 was definitely not the low as we were expecting and now since it has been broken there is every chance of market falling a little more from here.

However inspite of such a brute fall today, there is a still a possibility of markets attempting to form a bottom around these levels. RSI for starters is not supporting this fall, on daily chart we saw some strong positive divergences. Also if we look at the entire pattern, the  impulsive upmove started from 10583(in Feb) to 12103(May) has been retraced by almost 90% now. Impulsive move in its first leg often gets retraced by 90% ( though 75-80% retracement is more common).

We are reading the move from 10583 to 11850 as an impulsive leg and the move from 11850 to 11100 to 12103 and now to 10720 as a corrective (ABC) move. The fall from 12103 is now in its 12th week, usually the fall in our markets last for 9-10 week and any move stretching more than this is stretching things a bit far and could be living on borrowed time .

Another imp thing to notice is the weekly RSI is sitting at 34 now and when was the last time weekly RSI was seen at this level? answer is October last year when Nifty was at 10K and prior to that in 2016 when Nifty was at 7K. So its very rare for weekly RSI to drop to such low levels and whenever that happens markets usually make a bottom. Now of course this time could be different and market and RSI can go on to make new lows, but the history suggests that inspite of widespread weakness, these are not the levels where one should be shorting Nifty.

so keep a watch on 10700 levels, if it holds and Nifty start moving up then 10850 is first resistance area to watch out for above 10850 we can see 11100 once again. On the downside weakness below 10700 could push Nifty back to 10600 (which would  negate our most favored and likely scenario)

Happy Trading!


 

Nifty Analysis, Outlook and Trend for 22nd Aug 2019

Medium Term Trend: ↓ Down (Changes to Up above 11300)

11000 Breaks: Nifty opened flattish but kept pushing lower and broke 11K.It threatened to break below 10900 but settled at 10917, down 100 points.

Yesterday we had mentioned that if 11K breaks then we can once again drop back to 10850-900 zone. Inspite of Nifty falling back to 10900 the short term upmove which started from lows of 10780 is still very much on and it would be a tad early to assume that the pull back is over and Nifty has started another move on the downside.

Nifty has some good support in the range of 10850-10900 and as long as it holds , it can again start moving up. For near term Nifty has good resistance in 11050 levels and Markets must cross 11050 in case it wants to start moving up.

For now the entire fall from 11170 levels is looking like a corrective ABC pattern ( which is in its last leg C) if market takes support at 10850-900 level and once again start moving up then probably the corrective leg will be over and market will open another leg on the upside which could take Nifty all the way to 11300 levels. On the other hand continuous weakness below 10900 and then below 850 levels could signal end of the bullish possibilities for now and Nifty will be in danger of testing 10600-700 levels.

Happy Trading!

 

Nifty Analysis, Outlook and Trend for 21st Aug 2019

Medium Term Trend: ↓ Down (Changes to Up above 11300)

Testing 11000: Nifty opened  flat to positive but lack of conviction in green zone pushed it back below 11K. It made another attempt to move in +ve territory in the second half but selling emerged yet again and Nifty went back to 11K. It finally closed at 11017 down 35 points.

Overall there is no change in our stance yet so will repeat what we have been saying since last few days. Its possible that markets have made some sort of bottom around 10780 however for this bounce to stretch further we need to see an upmove above 11175-85 levels. On the downside we had mentioned yesterday that 11K is likely to provide support and if its broken then we can head back to 10850-900 levels. Markets did drop to 11K levels but couldn't break it and it did provide some sort of support to the markets today.

Going forward too, same levels becomes important. Need to see if markets take support at 11K levels and try to push higher. For tomorrow 11075 becomes important above which market can try and test 11185 and if this level is crossed too then we are heading towards 11300 levels for sure. Medium term pivot level has been lowered to 11300 ( from 11365 earlier). If markets can manage to cross and sustain 11300 then much higher levels can be seen in Nifty.

On the downside todays low becomes important and a breach of same could push Nifty back to 10900 levels. Next couple of days are important and we expect markets to start some sort of trending move in next 2-3 days so from this perspective this weeks closing become very important.

Happy Trading


 

Nifty Analysis, Outlook and Trend for 20th Aug 2019

Medium Term Trend: ↓ Down (Changes to Up above 11365)

Gave up all the gains: Nifty opened strong today around 11100 levels and even went on to touch levels of 11150 before letting go of all the gains and closing almost flat.

Nifty has been showing strength at lower levels ( 10800-10900) at the same time its  also seeing some selling pressure above 11100 levels. Twice markets have tried but failed to close above 11150 levels.

We have been mentioning that Nifty has support at 10800-10900 levels and we could see some sort of a bounce back from these levels. We have seen a bounce back however for this bounce back to stretch further, we need to see a move above 11170-11185 levels. If markets can move and close above these levels then there is a strong possibility of Nifty testing 11350 levels ( which is also a crucial level for the medium term as per us). Technically too many daily oscillators have also started moving in +ve territory now ( MACD turned bullish couple of days back).

For now inspite of the fact that we saw a sell off from days high, the short term upmove which started from 10800 still remains on track and we need to see if markets attempts another shot at 11170-11185 levels and manages to surpass it. Once this level is conquered we can hope to see another 150-200 point rally in Nifty. On the down side if 11K level breaks then probably we are heading back to 10850-900 levels.

Happy Trading

 

Nifty Analysis, Outlook and Trend for 19th Aug 2019

Medium Term Trend: ↓ Down (Changes to Up above 11365)

Finding Support: Nifty opened down below 11K levels on the back of carnage in US stocks and made a low of around 10930 levels however buying support emerged yet again at lower levels pushing Nifty back above 11K levels. It made a high of around 11070 levels and closed at 11050. Up 20 points.

We have continuously been saying that its possible that some sort of near term bottom is formed already at 10780 levels. We had also mentioned that if levels around 10900 holds then we can see 11K + levels once again. We saw Nifty bouncing from 10900 levels on Wednesday and even today Nifty bounced back sharply form 10930 levels and todays upmove assumes a lot of significance since it has come inspite of Dow falling by 800 points. This shows market is building some sort of strength.

Just to take a step back, we went bearish in Nifty once 10985-11K levels were broken earlier this month as it was an imp level from long term perspective however the nature of fall witnessed below 11K levels didn't inspire much confidence about a sustained bearish move and the fact that weekly close was back above 11K levels suggested that break of 10985 was probably a false break hence change in our stance too.

We expected markets to take some support at 10850-10900 levels which actually happened and markets moved to 11100 levels. Now that markets have moved above 11K levels we need to see a move above 11175-11190 levels followed by a move above 11365 levels. If Nifty can manage that then we can see a further sustained towards much higher levels.

For now, in nutshell, we continue to believe that probably a short term bottom is done at 10780 levels and as long as 10900 holds we can assume that markets can move up from here. On the upside Nifty will face stiff resistance at 11100 and 11190 levels. Once these levels are crossed the next level to watch out for will be 11365 and crossing above 11365 will be a very big positive and could pave for much higher levels for Nifty in times to come. On the downside 10900 levels is a very important support and if its broken then probably 10800 could be tested again. Traders with long position can continue to hold with a SL of around 10900 levels.


Happy Trading