Monday, April 20, 2020

Nifty Analysis: Outlook and Trend for 21st Apr 2020

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

Flattish day: Nifty had a nothing sort of day today. It attempted cross above 9300 levels many times but each time it got dragged back below 9300 levels and closed flat ultimately.

Bulls needs to trade strong above 9315-9330 levels ( which is the high of last Friday) to stamp their authority over bears and if that happens (like we mentioned in previous post too) then there are strong chances of Nifty climbing all the way towards 9500-9700 levels.

Nifty is seeing lot of congestion around 9300 levels so ideally this level should be taken out on the upside and only question we should be asking is that whether it will be taken out immediately ( in next few sessions) or market will take some time ( few weeks).

There is some loss of momentum observed again today which is suggesting that one more drop toward 9200-9150 can happen but as long as 9100-9150 holds there is no real danger and Nifty can move up anytime. Markets are trading very light and OI in Nifty future is less than 1 crore ( we haven't seen such low OI in Nifty in last 15 years). And as we have discussed previously too, markets usually don't fall much when OI is so low.

So to summarise, keep an eye on 9330 on the upside and 9150-9100 on the downside. If 9330 is not conquered soon then its likely we drop towards 9150 once again and below that 8800-8900 level will see next support. Successful move above 9330 level is likely to propel Nifty all the way towards 9500 -9700 levels. Avoid short positions for now (as long as 9100 holds) and look to trade on buy side only

Happy Trading.

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Friday, April 17, 2020

Nifty Analysis: Outlook and Trend for 20th Apr 2020

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

Nifty Flies: Nifty opened with a bang around 9300 levels and then slowly drifted towards 9100 levels (disappointed by no cut in repo rates by RBI) but buying emerged at 9100 levels and pushed Nifty back towards 9300 levels.

Nifty needed to move back above 9100-9150 levels to signal resumption of short-term uptrend and Nifty did that in style. Though there were some intraday scares, Nifty finally managed to close near the high point of the day.

On Weekly charts this is the second consecutive higher close (first time it happened in last 6 months) and could indicate that undertone is slowly improving. For this week, Nifty has posted a hanging man/shooting star like pattern which could have some bearish implications if the highs of this week are not convincingly crossed. So in coming week we need Nifty to trade above 9325 levels if that happens then we are heading towards 9500-9700 levels. On the downside 9100 has emerged as a strong support now.

In summary, holding 9200 and moving above 9325 levels could push Nifty towards 9500-9700 levels and on the downside, if 9100 breaks, then it could drop towards 8900 levels once again. Below 8900 we can test 8500-8300 (chances are this scenario playing out are slim though).

From trading perspective we have been recommending against going short in this market ( and now you know why). One should look to trade only on the long side and if Nifty manages to crossing over 9325 levels convincingly on Monday then that would strengthen our stand further.


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Thursday, April 16, 2020

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.

Happy Trading.
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Wednesday, April 15, 2020

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.

Happy Trading.

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Monday, April 13, 2020

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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Happy Trading