Nifty Analysis: Outlook and Trend for 9th Apr 2020

Medium Term Trend: ↓Down (Changes to up above 9800)

Shooting Star: Nifty opened weak today but quickly moved into positive territory. It once again kissed 9100 levels and  moved lower towards 8700. It almost closed flattish at 8750 levels.

Nifty made a shooting start pattern on the daily charts today ( shooting star is characterised by a long shadow and very small real body). Nifty opened around 8700 made a quick dash towards 9100 and again came down. Such patterns are usually trend defining or trend changing patterns. Whenever markets make such patters it becomes interesting to see how market trades above and low of the days high. So going forward trade above 9100 and below 8650 becomes intresting.

In Last post we had mentioned that in case nifty moves above 9050 levels, it will be a second confirmation signal that markets are probably ready to change the trend to the upside now. Even though Nifty failed to close above 9050 levels and just made a quick dash over it, it is a good enough sign. Market is continuously giving signs thats perhaps its done with downmove for now.

Last time (few days back) when Nifty had touched 9050 levels, it had dropped back to 8k levels, a similar script seems to be playing out again but I doubt if thats how it will turn out once again ( it might, but chances are against it for now).We have seen a faster retracement of fall (fall from 9050 to 8050 took 4 days and now same is fully retraced in just 2 days) and as per technicals, its a classic reversal sign. Now we need to see if market again moves back above 9k levels and take out 9800 levels as well, that will change the medium term trend to UP for good.

So will keep it short today as our views have not changed and we have got a second confirmation which suggests that trend could be changing now. Avoid short and look to enter long positions.


To join our algorithm based buy/sell whatsapp service during market hours, pls click below link or whatsapp @ 9319321906 
Nifty Buy/Sell Algorithm
Happy Trading

Nifty Analysis: Outlook and Trend for 8th Apr 2020

Medium Term Trend: ↓Down (Changes to up above 9800)

Back with a bang: Nifty opened with a smart gap up around 8400 and didn't look back, it kept on marching on & on and even crossed 8800 levels. Settled finally at 8792. Up by whopping 700 points.

In yesterdays post we had mentioned :-

"a move above 8300-8350 levels can push Nifty back towards 9000 levels if that is taken out  (faster retracement of E leg of Extracting triangle as mentioned in the previous posts) then we are going straight towards 10K levels".

We further mentioned that:-

"the fall from 9100 to 8000 levels ( last few days) is appearing tired and slow. Move on the downside has to be sharp and quick, whenever we see slow falls, the chances are its just a correction and market will start moving up again once its done."

Nifty opened around 8400 and touched 8350 once and zoomed towards 8800 levels. We had also been mentioning about market forming a bullish 'extracting triangle' and 'falling wedge'. Friday market dropped to around 8100 levels which was near the breakout area of falling wedge( more about it can be read in the previous post here - Update for 31st.

Taking support/bouncing from 8100 level and crossing above 8400 level is a very bullish sign indeed. It is a first sign or confirmation that the fall from 9050 to 8100 levels was just a correcting move and that probably mkt is ready to change trend now, for a second sign/confirmation we need Nifty to move above 9050 levels in next 2-3 trading session. If that happens then we could say that 'extracting triangle' is probably done and is power could push Nifty really high ( like the bearish extracting triangle which formed around 12K area had pushed Nifty lower). For a final confirmation we would then be needing Nifty to cross above 9800 levels that would change the medium term trend to 'up'.

In case we do see Nifty moving above 9050 levels in next couple of trading sessions that all short term short positions should be exited as the next logical target is 9800-9900 for Nifty. As far as trading is concerned we added long around 8570 levels today and further recommend entering long positions in case Nifty manages to move up above 9050 in next few trading sessions.

To join our algorithm based buy/sell whatsapp service during market hours, pls click below link or whatsapp @ 9319321906 

Nifty Buy/Sell Algorithm

Happy Trading

Nifty Analysis: Outlook and Trend for 7th Apr 2020

Medium Term Trend: ↓Down (Changes to up above 9900)

Below 8100: Nifty opened with a small gap and traded in a small range between 8200-8100 for most part of the day on Friday and closed just below 8100 levels down 170 points.

Nifty has dropped to 8100 levels which is the breakout area of the falling wedge failing to hold this level and further weakness below 8050 levels could push nifty back to 7700-7800 levels. However whenever market has dropped below 8500 it has always managed a comeback in next few sessions. Regular reader of the post are aware that on monthly charts, at levels around 8400-8500 Nifty is more or less done with corrections which is in line with previous major falls seen earlier ( in 2008-1999 & 1992).

In March even though we fell below 8000 and all the way down to 7500, the monthly close came above 8500 levels which furthers strengthens our view. However we had also mentioned that we should not be seeing too much weakness below 8500 and not for too long. For this month its very important for nifty to make a close above 8500 levels agian and then in subsequent months these levels around 8k should not be tested again.

Long term support line ( which only got tested once in last 20 years) was broken temporarily in March however the monthly closing was above it. So even though it had raised few doubts, for now it holds.

Sensex

Also, the rise from 7500 to 9100 levels is apprearing impulsive on the daily charts whereas the fall form 9100 to 8000 levels ( last few days) is appearing tired and slow. Move on the downside has to be sharp and quick, whever we see slow falls, the chances are its just a correction and market will start moving up again once its done.

In summary, keep an eye on 8050-8100, if we see sustained selling below this level then mkt can go down to 7700-7800 levels once more and if even these levels are broken then we could be looking a very long and painful correction ( not so much price wise but time wise). On the other hand a move above 8300-8350 levels can push Nifty back towards 9000 levels if that is taken out  (faster retracement of E leg of Extracting triangle as mentioned in the previous posts) then we are going straight towards 10K levels.

To join our algorithm based buy/sell whatsapp service during market hours, pls click below link or whatsapp @ 9319321906 

Nifty Analysis: Outlook and Trend for 2nd Apr 2020

Medium Term Trend: ↓Down (Changes to up above 9900)

Below 8300: Nifty opened weak and kept drifting lower. It kept moving on moving south in a steady move and touched 8200 levels intraday & closed at 8250, down 350 odd points.

In last post we had mentioned that Nifty can drop to 8150-8200 levels ( which is the breakout area of falling wedge) and below which it can further fall to 7800 levels but going below 7800 could mean Nifty is preparing itself for an extended stay at lower levels.

Broadly speaking, 8500 is the level, where nifty has completed a major correction (which is in line with all major corrections seen in Indian markets). whenever Nifty has fallen below 8500 levels, it has managed to bounced back. Last 2 weekly close have been above 8500 and even the monthly close yesterday came above it. Vix is falling daily but still above 60 which is very high for normalcy to return to markets, it should fall below 25-30 levels, till then market is likely to continue moving sharply in either direction.

Last post we had also mentioned about the possibility of a bullish extracting triangle, that option is still on and will be negated once E leg becomes larger than  C leg ( i.e, below 7750-7800 levels.).

Hence we should continue to observe markets and if Nifty takes support in 7800-8200 range ( big range) and move back sharply  above 8500 levels then there is a possibility of markets starting a new trend on the upside. If we continue to witness weakness below 8200 and 7800 levels then the pattern will be negated and will be strong sign then markes are preparing itself for an extended correction and likely to be range bound/weak for quite some time ( 10-12 months from here).

To join our algorithm based buy/sell whatsapp service during market hours, pls click below link or whatsapp @ 9319321906 

Nifty Buy/Sell Algorithm

Happy Trading!

Nifty Analysis: Outlook and Trend for 31st Mar 2020

Medium Term Trend: ↓Down (Changes to up above 9900)
Weakness resumes: Nifty opened weak around 8400 and held on to its opening lows but gave up in the end. It closed below 8300 with a substantial loss of 380 points.

There is still a lot of scepticism and nervousness which is visible at high levels ( which is understandable). In last post we had mentioned that short term trend has changed to +ve and we need to see if it has powers to change the medium term or reverses back to -ve zone. Today, once 8300 was broken, chances of short term again going back to -ve zone has increased.

There are couple of interesting observations I would like to highlight in todays post so would request everyone to read carefully (and atleast couple of times).

Regular readers of the blog would be aware that Nifty had posted an 'extracting triangle' (in late Feb) which we had mentioned in our 24th Feb post (same can be read here : Nifty update for 25th Feb). below is the chart which we had put.

Nifty daily ( Feb 2020)

This was a bearish 'extracting triangle' (more about such formations can be read here: Extracting Triangles) which got completed around 12100-12200 and after its completion Nifty corrected almost 5000 points in 4-5 weeks. Now everyone can see the power of extracting triangle and how it formed during this market top.

Now look at Nifty chart for last few days, there is a possibility that a similar extracting triangle ( bullish this time) is getting formed at lower levels. This has been in formation since Nifty hit a high of 10200 level (on the first freeze day). Here A>C and D>B. So far E is smaller than C ( rallies are getting bigger and falls are getting smaller)

Nifty Daily

As long as E remain smaller than C, meaning Nifty doesn't fall below ~7700 levels and then mkt goes on to recover and make a new high above 9100 levels will confirm completion of a bullish extracting triangle. Last extracting triangle created a top can a new one create a bottom? Yes it can provided it indeed turns out to be an extracting triangle ( i.e, E remains smaller C followed up by a faster retracement above 9100 levels)

Now lets see another chart. We had also mentioned a possibility of markets completing a contracting wedge recently.

Nifty Hourly

Breakout point for this contraction/wedge is around 8150-8200 levels so that should act as an support in near term however if it goes down then the next support will be around 7750-7800 levels which is also the starting point of 'B' leg of extracting triangle (or D leg of contracting wedge). Weakness below 8150 and then 7750 will negate the formation of extracting triangle and wedge (both) but as long as these level stands there is always a chance of market staging a comeback.

In Summary if 8150 or 7750 holds and we see a sharp recovery back above 9100 levels then there is a strong (infact very strong) possibility that bottoming out process is over and done and market is ready to scale new heights. However consistent weakness below 7750 levels will push markets again in deep correction mode time wise ( like we have been mentioning in prior posts). Hence one need to be careful and accordingly trade.

To join our free trial of algorithm based buy/sell whatsapp service during market hours, pls click below link or whatsapp @ 9319321906 

Nifty Buy/Sell Algorithm

Happy Trading!

Nifty Analysis: Outlook and Trend for 30th Mar 2020

Medium Term Trend: ↓Down (Changes to up above 9900)

Volatility Continues: Nifty opened strong and even touched 9K+ levels, but gave up all the gains to close flat at 8660 levels.

Nifty might have given up 400-500 point from days high but important thing is that markets have managed to close above 8500 levels. Second successive weekly close has come above 8500 levels which is a positive sign. Though we would have liked to see a weekly close above 8800 levels, nifty did hit that level intraday but couldnt manage to hold on to it. profit booking by traders once the rate cut news was out kept the selling pressure up. Rate cut news was more or less factored in prices already hence markets ignored it today.

Going forward , we need to see if markets is managing to hold on to 8000-8500 levels in coming days. if it does then chances of markets making another move towards 10K is there but if weakness resumes below 8500 and then below 8k levels then probably we are heading towards deeper correction which is likely to stay for some time to come. For now, chances of first scenario playing out is higher than the second but anything is possible in markets so lets see.

Nutshell, short term trend has changed to UP and a move 9900 will change the medium term to UP as well, so we need to see if short term trend has the power and momentum to change the  medium term too. Trading wise will still recommend avoiding short ( as long as 8K level holds).

To join our free trial of algorithm based buy/sell whatsapp service during market hours, pls click below link or whatsapp @ 9319321906 

Nifty Buy/Sell Algorithm

Happy Trading!

Nifty Analysis: Outlook and Trend for 27th Mar 2020

Medium Term Trend: ↓Down (Changes to up above 9900)

Nifty Exhibiting Strength: Nifty opened around 8500 and went on to cross 8700. There was some usual volatility and Nifty threatened to gave up all its gain but fnally managed to close above 8600 and added 300+ points in the process.

Yesterday we had mentioned that Nifty seems to have broken a falling wedge (which is a bullish pattern) hence the chances are that we see some sharp movement from here. We had also advised against going short in this markets and instead advocated going long on dips. Nifty did touch almost 8800 levels today itself.

Also we have been mentioning that correction seems to be done around 8500 levels (Mondays fall had raised a doubt but nifty has managed to climb backup again so it can be ignored). Last weekly close was above 8500 and if Nifty can close again above 8500 ( 8800 preferably) then we will have positive weekly close in many weeks. Then a monthly close above these levels will be a strong indication that perhaps bottom is done already.

So will keep it short today, overall view remains same, the current thrust from the ralling wedge has the capacity to push markets above 9k levels so avoild initiating shorts (as long as 8100-8200 holds). If Nifty manages to hold/move back above 8500-9000 range then the chances of it starting a fresh trend on the upside will increase. Volatility is still pretty high (VIX is 70+ which is insane). Some stability can be expected once VIX start trading below 40 ( which is still very far away). Remember markets will find its bottom and start a trend on the upside much before this Corona issue start to dissipate. Markets always prempts and acts in advance ( thats what make them intresting isnt it?).

From trading perspective we did enter long around 8K levels yesterday,To join our free algorithm based buy/sell whatsapp service during market hours, pls click below link or whatsapp @ 9319321906 

Nifty Buy/Sell Algorithm

Happy Trading!