Nifty Analysis: Outlook and Trend for 25th Feb 2020

Medium Term Trend: ↓Down (Changes to up above 12250)

Black Monday: Nifty opened with a huge gap down of 130 points at 11950 levels. It consolidated a bit around 11950 levels and gave up during last couple of hours of trading to close at 11830. Down by whopping 250 points 

Todays fall was important from many perspective & it changes quite a few things. It has also conclusively settled things in the favour of bears hence we have changed the overall trend to 'down' with a reversal pegged at 12250 levels.

Originally, the bounce which Nifty generated after the budget day fall, was a V shaped recovery and once it crossed above 12150 levels, was considered a start of a fresh up leg. The fall which followed from 12250 to 11900 levels was previously seen as a corrective move (complex correction) post which nifty was supposed to open a fresh move on the upside. However we had also mentioned the possibility of entire upmove from 11600 levels forming as 'extracting triangle' . Bearish extracting triangle is a pattern where falls keep getting bigger and bigger and rallies keep getting shorter and shorter. Faster completion of last leg ( i.e, E leg confirms the completion of extracting triangle). Extracting triangles forms rarely and are indicative of distribution. Markets are initially pushed higher which is used by smart money to offload their holding as a result each subsequent rise is smaller than previous rise and eventually when the distribution is complete, markets reverses and start falling. More about extracting triangles can be read here Extracting Triangles

The other important thing which should be observed is that Nifty had formed a 'gap-up' area near 12010-12040 zone couple of days back which got filled today and interestingly enough through a 'gap-down' move only. Such patterns are called 'island reversal' and in this case its an bearish island reversal.

Nifty

Now because of these 2 developments we have been forced to change our medium term trend signal to Down ( even though the previous reversal area of 11750 is yet to be tested).

Going forward nifty is likely to continue the downmove ( which is still a correction only on a larger time frame). Now this downmove can form a simple zigzag A-B-C like pattern ( currently we are assuming larger B leg got over as abcde extracting triangler and larger C leg has started) or a triangle ( ABCDE). A triangle can further be contracting or descending ( wedge). If its a contracting, then Nifty is likely to protect the lows of 11600 and the last 2 down legs ( i.e C & E) will form above 11600 only. However if its a descending triangle then its likely to hit new lows below 11600. Will have to keep an eye and observe how the pattern is shaping up  in next few trading sessions.

So in nutshell, we were expecting Nifty to complete a irregular correction around 11900 ( especially after seeing the fierce bounce) and then start a new leg on the upside however todays open ( at 9.15 it became clear) confirmed that Market remains in a correction mode which is now likely to extend (both in terms of price and time) on the downside.Global markets are not in great shape and markets everywhere are tumbling hence expect the weakness to continue for now. Only silver lining we can see for bulls is that markets are a tad oversold on short term charts hence a bounce back is always on cards.

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Nifty Analysis: Outlook and Trend for 24th Feb 2020

Medium Term Trend: ↑UP (Changes to down below 11750)

Rangebound Trading: Nifty consolidted its position today and traded around 12120 levels for most part of the day. It did try to cross above 12150 intraday but failed and dropped below 12100 levels just before close. It closed at 12080 down 45 points.

In last 2 days Nifty has seen a rise of around 250 points (11900 to 12150) so a little bit of consolidation is expected and is healthy at these levels. Yesterday we did mention about the possibility of Nifty completing a 'complex correction' and starting a new trend on the upside. We had also mentioned that the entire move from the lows of 11600 is developing like a bearish "extracting triangle".

For bullish options to work out, Nifty should continue the uptrend and make a move above 11240-11250 levels soon and for bearish options to materialise, nifty needs to fill the gap which stand at 12000-12040 levels and goes on to break below 11900 levels ( Tuesdays low) in next couple of trading sessions itself. More time  Nifty spend in consolidation above 12K levels, more it  goes in favour of Bulls.

So in nutshell, Nifty remains in uptrend and we need to observe if Nifty manages to add more gains and manages to make a move above 12250 levels in coming trading sessions. If that materialise, then bulls will further reaffirms its position on the other hand if 12000-12040 levels is breached then Nifty is likely target to 11900 once again and its break could bring bearish scenario in picture once again. For now we have to believe that market is in uptrend (with a eye on 12K-12040 levels ofcourse).

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Nifty Analysis: Outlook and Trend for 20th Feb 2020

Medium Term Trend: ↑UP (Changes to down below 11750)

Nifty Marches: Nifty opened strong above 12K and after flirting with 12100 levels, it managed to make a close above it & added about 140 points.

Nifty had seen a big cut on Monday & Tuesday where it went on to test 11900 levels but today it erased all the losses for current week and now trading above the closing price of last week( and more importantly 12100 levels).

In last post we had mentioned that 12100-12150 is the support area for nifty and its possible that markets are creating an inverted H&S pattern which carries bullish implications. Nifty couldn't manage to hold 12100 levels and thus negated the H&S pattern that did change the trend for very short time but overall there was no change (from medium terms perspective) and Nifty remained in bullish trend. Nifty broke below12100 levels on monday which brought further weakness and made bears go active again and they managed to pushed Nifty all the way back to 11900 but like we mentioned earlier, Nifty continued to remain in bullish zone and attracted buying at lower levels which has put nifty back again above 12100 levels today.

Now lets step back a little and see how things are developing. Nifty rose all the way from 11600 to 12150 in about 4 days and what we saw after that was a (possible) complex correction. Now thing about complex corrections is, when in progress, they are nearly impossible to identify hence impossible to trade. However good thing is that when they get over they usually offer some good trading opportunity however traders are already frustrated seeing markets going up and down in a complex correction so they do not risk a new trade when a new trend starts ( fearing reversal yet again).

In complex corrections markets make new high and break previous bottom yet it remains a correction. Here nifty dropped from 12150 levels to 12000 ( 170 points) then from 12K levels Nifty made a new dash towards 12240 levels and again dropped below 12K ( which was the previous low). Now interesting thing to note here is that Niftys new high at 12240 (last week) was ~90-100 points higher than previous high ( 12150) and when it dropped to 11900 then its low (11900 yesterday)  was again 90-100 points lower than previous low (12000). So both the b & c leg of this correction seems to be perfectly synchronised or proportioned. Nifty action during last few days might seem chaotic but there is an order in chaos if once notices carefully.

Nifty

While we believe its a complex correction, there is also a chance that the entire move from 11600 is developing like a bearish extracting triangle ( which has 5 legs) and nifty is currently forming leg 5. We need a strong move above 12170-12200 to cance the probability of Nifty making extracting triangle.

So just to summarise, inspite of last 2 days maniac fall, Nifty still remains in upmove and the fact that it has closed above 12100 yet again, makes this a strong possibility. For further sign of confirmation, Nifty needs to move above 12175 & 12250 levels in next few trading sessions.On the downside the gap area between 12010-12050 is likely to offer strong support and if Nifty makes a close below 12K levels, then again the entire structure needs to be revisted.

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Nifty Analysis: Outlook and Trend for 14th Feb 2020

Medium Term Trend: ↑UP (Changes to down below 11750)

Nifty Consolidates: Nifty opened below 12200 levels today and traded around 12150 levels for most part of the day today. It threatened to move down below 12150 many times but didnt and finally closed at 12175 levels down 25 points.

Yesterday we had mentioned that overall trend of the Nifty has changed to 'Up' now and the market is likely to find support at 12100-12150 zone ( which was the previous resistance zone). Today market did find support at 12150 zone and the level held through out the day (inspite of the fact that dow future was trading almost 200 points down). We had also mentioned about the possibility of Nifty making an inverted H&S pattern which seems to have broken on the upside and today markets came down to test the neckline of the same.

We now need to observe if the lows of todays are protected tomorrow as well and markets use this level ( 12150) as a base to propel itself towards higher level. Holding 12150 and crossing above 12250 will further confirm that we are on right track. However if we see weakness tomorrow or next few trading session and market goes on to break below 12100 levels then probably we will have to start being cautious again.

In summary, no major update today and the views of yesterday still hold. If market hold 12100-12150 and goes on to break above 12250  then all time highs are likely to be tested again and if 12100-12150 doesn't hold then ? Well..will cross that bridge when we get there.

Happy Trading!! 

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Nifty Analysis: Outlook and Trend for 13th Feb 2020

Medium Term Trend: ↑UP (Changes to down below 11750)

Nifty Marches Ahead: Nifty opened above 12170 levels and  went on to cross 12200 with ease. It threatened to break below 12200 for some time but eventually settled at 12200 up 90 points.

Now that Nifty has successfully closed above 12175 levels and the way charts and other indicators are pointing, we can safely conclude that overall trend has changed to back up again.

Nifty had seen a huge fall of 500+ points (leading upto the budget & on budget day) previously prompting us to change the term to 'down'. There was a strong possibility that Nifty could revisit the lows of 11600 or lower and then only resume the uptrend however ultimately the price is the king and if charts are suggesting that the fall to 11600 was just a pull back ( and not a trend down) then we have to believe it. By closing above 12175 levels today, nifty has negated the bearish implication of most of the negative candles it made previously.

Now going forward, its likely that current rally will continue, ofcourse intermittent 100-200 pullbacks will keep on coming but the overall trend should remain on the upside. We expect market to have a strong support in the12100-12150 zone now (old resistance become support).

Another interesting development on the intraday chart is that the entire move of last few days ie., the fall to 11600 levels and now the pullback back to 12200 levels is looking like a 'inverted head & shoulder patterns'. Neckline of this pattern is also sitting at 12170 levels ( which also coincides with our trend reversal level).

In Nutshell, the overall trend of the market has turned back to bullish now and the trading strategy going forward should be to 'buy on dips' rather than to 'sell on rise'. Yes we were expecting markets to remain weak for some more time and test 11600 or lower levels and yes it didnt materialise. Our ultimate goal is to be in sync with market and to remain in line with market and since charts have changed we should change as well. From trading perspective, the band of 12100-12150 should offer good support now and if Nifty start closing below this range again then it will be the time to be cautious again.

Happy Trading!! 

We keep guiding and advising our subscribers during live trading hours through regular whatsapp updates. To join us please click the below link/button or mail to rahulrtn412@yahoo.com or whatsapp:9319321906 (Pls don't call or send text for mkt view/opinion as we will not be able to respond to such msgs)

Nifty Analysis: Outlook and Trend for 11th Feb 2020

Medium Term Trend: ↓Down (Changes to up above 12175)

Nifty Turns Cautious: Nifty opened weak today around 12050 levels and went on to test 12K levels quite a few times intraday. It finally closed at 12030 levels down 70 points.

In last few updates we have been mentioning that Nifty has good resistance in 12100 zone and inspite of a strong rally of 500+ points from the lows of 11600 levels we maintained the trend as 'down' only ( revised the reversal level to 12100 and then finally to 12175).

Today we did see some weakness in Nifty and one stage market was down 100+ points however followup buying at lower levels prevented any major fall and market closed with just a small loss of 65 odd points. Like we have been saying, the bounce which has come form 11600 levels is a 'V' shaped recovery and there is a chance that this V shaped recoveries is driven by sentiments and greed rather than actual buying. Sentiments and greed can pull markets till at a point only after that the upmove can be stretched further only by real buying and we are yet to observe if real or followup buying is indeed emerging at these levels.

In last 2 days we have seen a fall of about 150+ points and last Friday Nifty had made a 'bearish belt hold patter' which we suggested was a bearish pattern provided we see followup selling below the low point of the day. Today we saw exactly that, Nifty opened below fridays low and whole day traded below that only.This again can have some more negative implications gong forward.

Going forward, for positive scenario to emerge, Nifty should defend 11850-11950 range. If nifty can consolidate and create a support zone around 11900 levels then we expect it to touch higher levels ( 12500) once again. However in case we see more weakness from here and Nifty goes on to break levels as mentioned above, then we can see a retest of old lows @ 11600.

In summary, inspite of a 500+ rally in last few days market is not out of the woods completely there is still a possibility of Nifty retesting 11600 levels. For a positive scenario to emerge market must protect 11850 levels and then break above 12175 levels to resume uptrend.

Happy Trading!! 

We keep guiding and advising our subscribers during live trading hours through regular whatsapp updates. To join us please click the below link/button or mail to rahulrtn412@yahoo.com or whatsapp:9319321906 (Pls don't call or send text for mkt view/opinion as we will not be able to respond to such msgs)