Nifty Analysis: Outlook and Trend for 17th Apr 2020

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

Held Yesterdays low: Nifty opened weak around 8850 levels but didn't stay there long. It moved cautiously and hit a intraday high of around 9050 levels and finally closed around 9k levels up 70 odd points.

In previous post we had mentioned that weakness or fall from 9250 level has broken the upward momentum and if we see further weakness below todays low ( 8850) then nifty can fall even more. On the other hand if we see a fast retracement above 9100-9150 levels then nifty will be back on track and can move back again above 9500 and higher levels.

Today Nifty did protect yesterdays low and more importantly the gap zone which stands at 8800-8900 levels, is protected too. Having said the fall yesterday has broken the momentum for immediate term and Nifty needs to move back again above 9150 levels to signal resumption of momentum/Upmove. Today Nifty's move from 8850 appeared slow and momentum/force was missing which could be due to weekly expiry but still it could be a indicator that its just a pullback rally. If Nifty fails to cross above 9100-9150 levels then we can see another wave down towards 8800 levels.

Overall, from a long term perspective, we continue to believe that Nifty has completed (or is in process of completing) a major correction around 8500 levels, though we did fall below this level but the weekly and monthly close always came above 8500 levels which is validating our views (for now atleast).

For next 1-2 trading sessions one need to see if nifty is able to cross 9100-9150 with momentum and force and if that happens then we can hope for the resumption of up-move towards 9500 and 9800 levels. On the other hand sideways or lethargic movement below 9100-9150 levels could once again push nifty back to 8800 or lower levels once again. We continue to advise against going short in this market but look to enter longs only at crucial breakout zones.

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Nifty Analysis: Outlook and Trend for 16th Apr 2020

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

Surrendered all Gains: Nifty opened with a gap-up and went on to touch 9250 levels, however it couldnt sustain there and in the second half of trading session slipped again below 9000 levels to close at 8935 levels.

In the first half Nifty was up 250 points and then in the second half it was trading 100 down. The way Nifty fell from 9200 levels and below 8900 levels ( which was the low of previous session) does raise some question marks on this rally/upmove which started from 8k levels. Ideally we would have liked Nifty to protect previous session low (especially after a solid gapup opening).

In our previous posts we had been mentioning about the possibility of Nifty moving above 9k levels towards 9500 and then towards 9800. Though Nifty touched 9250, todays fall does seems to have put a small brake on this overall upmove. Now its possible that entire fall is retraced immediately in next 1-2 trading sessions and Nifty once again moves back above 9100-9200 levels. If that happens then our old view will continue to hold, however if we see followup weakness below 8850 tomorrow ( below todays low) then its likely that Nifty remains weak for some more time and may not move towards 9500 in a hurry. If that happens then we will have to reassess the short term scenario.

9k levels has now seen too much congestion, and usually whenever congestion are formed they are taken out. Now unless we start seeing sharp falls and Nifty once again drops towards 8k levels ( chances are pretty slim) there is a possibility that market will eventually break above 9100 levels and move towards 9500 levels.

So in summary, todays move was indeed disappointing and Nifty failure to move and close above 9100-9150 levels has put a small brake or question mark on this ongoing rally, however if we see a move again above 9100 levels in next 1-2 trading sessions then probably todays fall was just an oneoff thing which can be ignored and we can once again expect markets to make a move towards 9500 levels. On the other hand more weakness below 8850 levels could delay things and push nifty back towards 8500-600 levels. In either situation stay away from indulging on the short side and if Nifty start trading above 9100 levels then look to enter long positions.

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Nifty Analysis: Outlook and Trend for 15th Apr 2020

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

Pull Back: Nifty opened weak around 9050 levels and traded in a tight range between 8900-9100 for most part of the day and closed right at the mid point of this range @9000 levels.

Volatility was relatively less today and broadly Nifty continue to move in line with our expectations hence we continue to maintain our old view as of now.

Last Wednesday Nifty had made a shooting star pattern and we had mentioned that trade above or below the high/low  (9100- 8650) of shooting star candle will be interesting to watch and could define the near term trend of the markets. Since last 2 trading sessions markets have tested the high twice but not yet convincingly moved above it. However there are other indicators which are suggesting that Nifty can move above 9k levels and then towards 9800 levels in near term.

Last Thursday, Nifty had seen a gapup opening and the gap stands at 8900-8750 levels, today inspite of the weaknesss the gap area supported Nifty. Holding this gap area for next couple of trading sessions will be yet another positive thing for Nifty.

So will keep it short today, nothing has changed in markets and shorterm positives continues to outweigh negatives therefore no reason to change our views yet. A succcessfull move above 9100 levels could push Nifty towards 9400 and 9800 levels (above 9800 the medium term trend will change to 'up' as well). On the downside, 8900-8800 area is likely to offer good support so this area can be utilised to initiate fresh long positions with a Sl of around 100-150 points. A break of this level could push Nifty back towards 8600 levels though.

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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.


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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.

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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.

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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.

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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).

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