Nifty Analysis, Outlook and Trend for 30th Aug 2019

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

Weak Expiry: Nifty opened down today below 11K levels and made a low of 10920 levels. It made an attempt to cross 11K levels however couldn't sustain it and once again dropped to 10950 and closed almost 100 points down.

 

Nifty was pretty volatile today ( which is expected on a expiry day). yesterday we had mentioned that if 10980 is breached then will have to analyse it further, however looking at the way market moved today ( and the fact that it was an expiry day) , the breach of 10980 is not looking threatening as of now. The way market traded today shows that band of 10900-940 is likely to offer good support and further weakness is likely below this zone only.

 

Markets tend to volatile on expiry days hence one should not read too much into the ups and downs, mostly these movements are just there to extract favorable 'call/put settlements' by smart money. There was a good OI at 11K Puts which suggested that probably the expiry is going to come above 11k levels however it was not to be.

 

Now going forward we still hold on to our view that Nifty (probably) can go higher from here but for that to happen we must cross 11175-11220 levels. This zone is continuously acting as a resistance and nifty has tried 3 times to cross it but failed each time. However there is still a chance for markets to do that and if that happens will be extremely +ve for bulls. Intraday volatility is likely to be on higher side especially since global markets continue to be all over the place. On the downside 10900-940 zone is likely to offer support but no serious move on the downside is expected as long as 10850 holds.

 

Happy Trading!

 

 

 

 

 

 

Nifty Analysis, Outlook and Trend for 29th Aug 2019

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

Cooling off: Nifty opened flattish to positive but failed to sustain above 11100 levels. it dropped below 11K levels momentarily but recovered a bit in last hour to close at 11050 levels, down 60 points.

Yesterday we had mentioned that Nifty needs to take out 11175-11220 levels to establish the upmove firmly, however Nifty failed to do that but inspite of that nothing has changed now. We still believe that there is a strong probability of market hitting a near term bottom around 10650 levels but to confirm that we need a move above 11175-11220 levels. If nifty can sustain above 11200 levels then it will be a very big positive for markets.

Nifty might have dropped below 11K today but the fall was shallow and too slow and for now looking like a corrective pullback. If we see follow up selling below 10980 levels tomorrow then we will have to analyse it further but till then we don't think we should be reading too much into it.

So for now there is no change in our view and if Nifty crosses and sustain above 11220 then it could open a gateway to much higher levels & on the downside 10980 and below that 10900 levels should act as a very strong support. Tomorrow is expiry day so market can behave erratically but after that we should be seeing a clear trending move (of course choppy moves and sudden fall of 150-200 can always be expected).For Aug series there is a strong OI in calls @ 11100 level and in puts @11000 level so probably expiry is going to be somewhere between 11K and 11100 levels.

Happy Trading!
 


 

Nifty Analysis, Outlook and Trend for 28th Aug 2019

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

Upmove Stretches: Nifty opened positive and traded in the positive territory through out the trading session. It closed at  11105 up 50 points.

Nifty traded positive but couldn't take out the previous resistance level of 11150-175. Last 2 times Nifty tried to cross these levels it failed and dropped lower hence some bit of hesitancy is expected around these levels. But the fact that Nifty is consolidating just below this 11050 is definitely a good sign for bulls.

We have been saying since last few days that there is a chance of Nifty hitting some kind of bottom around 10750 levels. Nifty did breach that level momentarily but again bounced back and is back above 11K levels in a flash. Usually that's how bottoms are made in markets, even before one can blink , bottom is hit and price moves back up again. Now in last 3 days Nifty has moved more than 350 points. Going forward 11200-220 is going to be a very crucial level. If Nifty can conquer 11220 then it could open gateways to much higher levels. Regular readers of this blog are aware that we have been bullish on the markets ever since it hit 10780 and highlighted few technical reason ( time cycles and the fact that weekly RSI had hit 33) to support our theory. We also mentioned that if certain things played out then could see a strong bullish move of 1500-2000 points from the recent lows. We still hold on to our view. However mind you, volatility could remain high and choppy moves could be seen in plenty.

In summary, keep an eye on 11175-11200, strong and sustainable move above this level will further strengthen our view and could push Nifty much higher from these levels on the other hand 10950-10900 should act as a very very strong support now and in case of a breach (chances look small) we could again dip towards 10800-750 levels.

Happy Trading!



 

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!