Nifty Analysis: Outlook and Trend for 15th Jan 2020

Medium Term Trend:  ↑ UP (Changes to down below 11770)

Exhibiting Strength: Nifty Continue to move up and continue to surprise everyone. It opened flat around 12330 levels and after griding at this level for most part of the day it made a small jump and closed above 12360 levels and added 30 odd points.

Like we have been saying for past many days that the trend of the market remains up and one should only lookout for trading opportunities on the long side in this market. All dips should be utilised to enter long positions and not for shorting. The same view stands even now. Market still remains bullish ( though short term charts are suggesting a bit of overbought status) & its likely that we will keep seeing intermittent pull backs of 100-150 points but overall the market will continue to march higher.

Now from near term perspective, 12300 was a strong resistance for the markets and the same has now been successfully conquered. Nifty has given 2 consecutive close above the 12300 levels so we now can safely assume that market has good support in 12250-12300 zone. Going forward whenever we see a correction it will be interesting to see if it takes support at 12250-12300 zone. Only once Nifty break below this range and sustain should we start looking things from a different perspective and if this range holds then higher levels towards above 12400-12500 are very much likely in near term.

In Nutshell, if 12250 -12300 holds then markets are heading towards higher level and if any pullback ( whether it starts from current levels or from  higher levels) breaks this range then probably we can see a temp pause in the current rally. Bears to regain control must break below 12250 and they should do it fast else bulls will run away ( like they have been).

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Nifty Analysis: Outlook and Trend for 13th Jan 2020

Medium Term Trend:  ↑ UP (Changes to down below 11770)

Turning Strong: Nifty opened at 12250 levels and attempted a shot at 12300 levels however it couldnt sustain there and dropped towards 12250 levels (up 40 points). In the process it posted a Doji kind of candle today.

We have been mentioning since last few days that markets are strong and we are expecting markets to move up. Even when skepticism was high and Nifty broke below 12100 and then 12K levels, we maintained our view ( infact we entered in long positions when Nifty dropped below 12k levels). In last post we had clearly mentioned that :

"if Geo political tensions subsides ( and it should after today's event) and doesn't escalates any further, then we can expect a sharp swing on the upside". 

This is exactly what we got to see. Nifty recovered sharply and put more than 300 points from the lows it hit on Wednesday. Nifty has now even crossed above ( and closed) the gap area of Monday ( 12190-12220) which was the last hurdles for bulls. As soon as Nifty opened above 12220 levels today it cancelled out the previous downmove and reasserted its bullish trend.

Now there are many with bearish stance who are taking comforts from the fact that we reversed from 12300 levels and that 12300 is a top area for Nifty. well its possible ( anything is possible) but the chances of that are very less as of now. Unless Nifty closed below 12150-12175 zone it will not be wise to expect any sort of correction or downmove from Nifty.

12300 is a resistance and market is respecting it but it has been tested far too often and the chances are its going to be broken on the upside in near term. 

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P&L summary (Nifty option writing) for Dec.

Power of selling options-

Below is the P&L summary shared with us by one of our client (he has been kind enough to share this and we are posting this with his due permission).

Now the special thing about this summary is that all trades have been executed in out of the money Nifty call puts in 2-3 lots ( max 4 lots in one go) using our trade recommendations.

We recommend going long/short in Nifty futures however for every buy recommendation this client has been selling out of money puts and for every sell recommendation Nifty calls have been sold. Now one might argue that by buying/selling Nifty futures one could have made a lot more money and thats true but the point is that by selling out of money call/puts one reduces the risk by a great deal ( more than 50%) and even if Sl is trigerred one is likely to exit with no or very negligible loss.

Now even after reducing the risk he has earned >30K in one month ( which might not seem a lot but it translates to > 10% return in one month ( >100% PA) and if someone is expecting more then he should head for vegas and not for Stock markets.

Nifty P&L

Nifty P&L

Nifty Analysis: Outlook and Trend for 9th Jan 2020

Medium Term Trend:  ↑ UP (Changes to down below 11770)

Stumbles but recovers: Nifty opened again with a huge gap down (thanks to geopolitical tensions) but immediately attracted buying at lower levels which pushed nifty back above 12K levels. It closed flattish @ 12025 ( down 30 odd points).

In last post we had mentioned that overall trend of the market remains strong and 11975-12K should offer good support to the markets and even if 11975 is breached markets are likely to found support at 11880 levels. Today markets opened below 11975 levels but didn't hang there for long and immediately moved up and the closing price has come comfortably above the 111975-12K range.

Tomorrow is going to be crucial, since last 2 days markets are exhibiting nervousness at higher levels (which is understandable and natural). As long as 11770 holds ( which is still more than 200 points away) market trend remain bullish and positive. Any fall should not be construed as a sign of weakness and should be taken as a part of consolidation process. Usually whenever markets fall due to some event ( especially after the event) then it recovers once ( even if it falls later). Nifty is attracting buying at lower levels and if Geo political tensions subsides ( and it should after today's event) and doesn't escalates any further, then we can expect a sharp swing on the upside. Many short positions are probably  created today/yesterday which could support Nifty on the way up.

In Nutshell, we remain bullish on markets inspite of last few days fall and geopolitical tensions and once situation normalizes, We can expect market to resume it uptrend once again. However volatility is likely to be high so if you trade, don't leverage and trade with qty you are comfortable with. On technical side, markets exhibited strong positive divergence as soon as it opened in -ve today so 11930-11950 was a good level to enter long positions (with a very favourable risk reward ratio).

Happy Trading!!

Nifty Analysis: Outlook and Trend for 8th Jan 2020

Medium Term Trend:  ↑ UP (Changes to down below 11770)

Finding its feet: After a horific black Monday, Nifty stablised slightly today. Infact it opened strong at 12150 levels but gave up around 100 points to close at 12050. Up 50 points.

In last post we had mentioned that markets remained strong and the probability of Nifty moving up from current levels has increased. We had also mentioned that  Its likely that sideways/corrective trend is on verge of completion and if 12150-12190 holds then Nifty can move up from current levels.

On Monday markets broke this range in the first 30 mins itself, settting themselves for an extended fall. Once 12150 was broken 12K levels was on card which was achieved in a flash. Now inspite of such a big fall the overall story for Nifty remains intact. Its just that markets will now probably taking a different route to reach its destination.

Nifty has a major support area at 11975-12K and 11880 below that and finally at 11770-11800. In coming days its possible that market tries to find support at 11975 levels but in case this level breaches then markets can fall some more towards 11800-11900 levels. We continue to believe that overall trend of market remains strong and positive and the current fall should not be construed as sign of weakness. This could just be a temporary setback and once market complete the current consolidation move (around 11800-12K range) it could once again start moving up with a great force.

In nutshell, we were expecting markets to move from 12100-12200 range however same got broken and Nifty has slipped to lower range but overall nothing changes and its actually good for the health of the markets as it will help nifty get rid of weaker hands.Now since the fall from 12300 to 12K is pretty sharp , its possible that markets spend some time consolidating at current levels but that doesnt mean that one should go short. recovery or moveup ( whenever it starts) from here can be very sharp so keep that in mind always.

Happy Trading!

Nifty Analysis: Outlook and Trend for 6th Jan 2020

Medium Term Trend:  ↑ UP (Changes to down below 11770)

Global Crisis Pushes Nifty: Market opened in negative territory  (around 12230) due to geo-political tensions and sudden jump in crude oil prices. It even dropped below 12200 intraday but recovered just below the end to close at 12230 levels. Down 50 odd points.

In the last update we had mentioned that its likely that markets are still in correction/sideways mode and since then markets are broadly trading in 12150-12300 (150 point range) confirming the same.

Today, inspite of plethora of bad news (Geo-political tensions etc) Nifty failed to break this range which is indicative of the fact that maket is still is in sideways/corrective mode. However  our analysis and chart reading is now suggesting that corrective/sideways trend is now over/likely to be over soon and Nifty is likely to move in a trend and the chances are that the move will be on upside.

I know many will raise serious doubt over our analysis (some could even find the idea of markets moving up from here laughable) specially considering the various things plaguing the markets right now but when we anlayse markets we have to see beyond the obvious and trust only 'price' and 'charts'. As of today prices and charts are suggesting that its likely that market has hit some kind of low already. To confirm this we need markets to protect 12160-12190 for next couple of trading sessions and then move above 12300.If that happens then there is a very strong (>80%) of markets moving up from here.

In Nutshell, keep an eye of 12150-12190 range if Nifty fails to break these levels in next couple of trading sessions then one more push on the upside is likely. However if it does break (even though the chances are less) then we will have to reanlyse and see things from a fresh perspective.


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Nifty Analysis: Outlook for 01st Jan 2020

Medium Term Trend:  ↑ UP (Changes to down below 11770)

Slips Below 12200: Nifty opened in negative territory and after spending most part of the day around 12200 levels, it fnally broke it towards the end and touched 12150 levels. It closed at 12170 , down 85 points.

On expiry day, Nifty had crashed to around 12100 levels and the very next day it bounced back. However the move from 12300 to 12100 levels ( last week) had taken 3 days, now another 3 days have passed since but markets have failed to hit a new high above 12300 (100% of the fall is not retraced), Which raises the question if market still remain in corrective/sideways mode.

Manner in which Nifty had risen post expiry had given an impression that correction is over and markets are ready to make a new high but today once it broke below 12200, it became clear that markets (may be) wants to spend some more time in 'correction mode'. Now correction mode can be a move down from here or a sideways trade.

Needless to say that we continue to believe that markets are in a bull trend and so far nothing is there on the charts which is suggesting otherwise. 12100 should act as a good support (since it was the previous high) and below that 11950-12K should act as a major support. Till the time markets are trading above 11950 levels, we do not recommend going short as the uptrend can resume anytime and without warning. Only below 11950 ( that too if its taken out swiftly) can one think of a quick short entry.On the upside  12275 remains a key hurdle for now and if markets manages to move above 12275 then higher levels towards 12400-600 can be seen.


Wish all our readers a Very Happy New Year and Happy Trading!