Nifty Technical Analysis: Outlook and Trend for 21st Sep 2020

Medium Term Trend:  ↑UP (Changes to down below 11275)

Weakness Creeping In:  Nifty attempted to move above 11600 but failed and crashed below 11500 levels. Recovered a little towards the end and managed to close just above 11500 levels.

In the previous post we had mentioned that :

"So in nutshell, a move above 11575-11600 levels could mean that consolidation is over and Nifty is ready to test higher levels however a drop below 11500 level could indicate that the consolidation is still in progress".

Yesterday we had posted a tweet just before market opened for trading stating that consolidation seems to be over and market might break on the upside ( if opening gains sustained).

 Nifty opened above 11550 levels but traded flat and failed to post any sizeable gains above 11550 levels and didn't manage to cross 11575-11600 levels. Though frankly speaking we were expecting markets to break above 11600 in Fridays session as timewise the consolidation pattern was looking completed on charts. However it wasn't so and as soon as Nifty broke below 11520 levels it became clear that pattern is evolving and markets may spend some more time consolidating.

Fridays fall has opened up couple of scenarios for the market. It has once again put markets in a possible correction mode which could push Nifty towards 11350 level. Nifty has good support in 11325-11350 zone and below that 11275 is the final proven support levels. Unless 11275 breaks , we don't expect too much weakness in the market and after consolidation is done we expect market to take out 11600 levels. 

Looking at charts we have no doubts that 11600 will be broken on the upside but before that there could be some more pain left (in form of consolidation and sideways movement). On the upside a move above 11600 levels will confirm the break on the upside.

So in nutshell, consolidation and sideways moves still continues (though we were hoping for it to end on Friday but it didn't materialize). On the upside a break of 11600 levels will confirm the completion of this consolidation and Nifty might open a new leg on the upside. Failure to do so, on the other hand, could push Nifty towards 11350 where we expect immediate support. Below 11300-275 we are looking at extended correction which could take Nifty much lower (towards 11K levels).

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To see our recent trading calls for Nifty Algo- Pls click ⤇  Past Trade summary (updated till 10th Sep).

What it takes to be a good trader:Characteristics of Markets

If one wants to be a trader then he should remember that market hates traders and by its very nature markets are designed to get rid of weak traders. By weak traders we mean who indulges in leverage trades and cant afford to bear loss beyond 2-3%. Market lure traders to get into wrong position and then triggers their SL that's the reason only 3-5% traders are able to make money in markets. There are few pointers which I have learnt (taught by markets actually) and would like to share 

• "Bulls make Money, Bears make money but pigs make nothing". This quote mean one should either be Bull or Bear but not a Pig. Pig is a confused trader, someone who is bullish in morning, bearish in afternoon and back to bullish by end of day. Of course one shouldnt be Just a Bear or Bull all the time and view should be changed based on market trend but it should not be changed very frequently.Identify the trend of the market and then stick with it dont be a confused traders. Trust your analysis and keep a view which is slightly longer ( 5-7 days atleast).

• Trade only on the right side of market: If the trend is up never short the markets, doesnt matter how convinced you are that its the top area. Let people on TV and youtube shout as much as they want to about market in overbought/overpriced territory. Keep a trailing SL book your profits (part or whole) but dont go against the trend. Similiary never buy when markets are in bearish trend (doesnt matter how lucrative the prices appears to be).

• Target never works: In market keeping a target never works, if Nifty is trading around 10000 and target area is 11K then rest assured Nifty will either touch 11500 or turn back from 10700 itself. Target is simply a myth and should be avoided, no one knows for how long markets will continue to move up. Keeping a target will always make you exit at wrong times. Instead keep trailing Stoplosses and continue to ride the trend for as long as it lasts. Dont be fixated on a number and be dynamic.

• No Intraday: Intraday forces a trader to take too many trading calls. One cannot time the market hence take a directional view and a positional trade only. More trading calls you take, more the chances of suffering losses ( don't be a Pig).

• Markets wont wait for you to enter: Trend reversal usually happens very sharply. If market drops to its support area and start hanging there consolidating then its very likely that the support area will be broken and trend will continue on the downside. Reversals are sharp  markets will just kiss the area and move back up. Its common sense, if market wants to move up why would it hang around at same spot for traders to enter into long position??. Remember- motive of the markets is to lure & suck traders into wrong trades.

• Avoid easy trades, leave gut feeling at home: Many times some trades seems 'easy' like for ex Nifty support area is 9500, market drops there and one feel its safe to go long here. Next thing you see market trading at 9200. Or Market opens with a gapup of 150 points. Easy trade will be to short market for 20-30 points ( Common thought: "after all its already up 150 points surely it will come down by 20-30 points its easy money isnt it"?). By the end of day Nifty is up by 250 points and instead of 20-30 points profit now one is sitting with a loss of 100 points.

• Be disciplined: Always stick to your rules ( if you don't have rules then make some), going against your own rules will occasionally earn you some profit but it will create a wrong habits and you would find that in long run your losses are far more than your profits. Markets will take everything in just one wrong trade.

These may sound simple, but will take you a lot of time to learn and implement. Even seasoned and experienced traders are not able to follow them all the time.Trading needs patience and give your self ateast 3-5 years ( in some cases even 10 years) to learn these simple traits and then apply in real life scenarios. If you want to make money then you have to do what 5% are doing and not what other 95%  are doing

Happy Trading!

Nifty Technical Analysis: Outlook and Trend for 16th Sep 2020

Medium Term Trend:  ↑UP (Changes to down below 11275)

Nifty Above 11500:  Yesterday, Nifty opened with a gap up but couldn't sustain it and dropped towards 11400 levels, today market has again made an attempt to move above 11500 and now the question is if its just a retracement and if Nifty is likely to open another leg on the downside soon?  Lets discuss.

Yesterday, when Nifty opened with a gapup, it was an excellent bullish move ( island reversal pattern) and it countered the gap down we had seen earlier on 4th Sep (when markets had opened with a gap down of 150+ points below 11400 levels from 11525 levels). Now if the gap-up had held yesterday, it would have created a base for an instant strong rally towards higher levels however it wasn't to be and Nifty closed the gap by end of the day. But inspite of that the bullish options are still open but now can different route meaning now Nifty can go in for some sort of consolidation before it start moving up and thrust on the upside may or may not be that strong.

Its entirely possible that we have completed the consolidation today or it can go on for couple of more trading sessions. Once this consolidation completes, we can see a fresh rally in Nifty.

Yesterday we saw a sharp pullback towards 11400 but today markets haven't given any followup selling below it, which probably means that it was just a corrective move on the downside (part of consolidation). Impulsive move when starts usually see a followup buying/selling the next day ( which was missing from today)

Now in case market fails to move above 11575-600 levels tomorrow and drops below 11500 again then it could mean that consolidation is still ongoing and we can retest 11400 levels ( or even slightly lower) however no serious threat or chances of bearish move till the time 11275 is broken decisively. This level has proved its mettle last week and now is one important pivotal level.

So in nutshell, a move above 11575-11600 levels could mean that consolidation is over and Nifty is ready to test higher levels however a drop below 11500 level could indicate that the consolidation is still in progress and we might spend little more time around 11400 levels before we start moving up. On the other hand, for any strong bearish options to open, we need a strong push below 11275 levels.

To Join our Nifty algo buy/sell whatsapp message service during market hours, pls click⤇ Nifty Buy/Sell Algorithm  or whatsapp @ 9319321906 

To see our recent trading calls for Nifty Algo- Pls click ⤇  Past Trade summary (updated till 31st aug).