Nifty Tomorrow: Prediction, outlook and Trend for 5th Jan 2021

Medium Term Trend:  ☝UP (Changes to Down below 13500)

Nifty @ 14132 up 114 points : Forming " Hammer Pattern"

In the previous update we had discussed that as long as 13825-50 holds, the upmove remains intact and Nifty can further move towards 14200 level. Today market made a high of 14150 levels and is almost nearing around 14200 levels. So overall mkt remained positive and it continue to move on expected lines.

Now moving forward, the trend still remains up and market can continue to move higher from here however there are couple of observations which we should keep in mind while trading for next few sessions.

a) Nifty is consistently rising and today posted a 9th consecutive higher high. From our experience we have seen that markets usually post max 9-10 consecutive highs and after that its likely to go for some consolidation or correction.

b) A strong hammer pattern is posted today on daily charts which has come after a strong rally of last 8 trading sessions. Such a candle could be an advance warning for correction/consolidation to follow.

C) Negative divergence continues on daily charts. Even after rising for more than 1000 points in last 9-10 trading session, market is still showing negative divergence on the daily charts.

In light of the above points, it would be better if one is cautious for next few trading sessions and keep tight SLs for long position.

Immediate support exists at todays low (around 13975 levels) and below that 13800 levels. Below 13800 markets could move down to 13500 levels which is a final support below which the trend will change to down.

Happy Trading & Happy New Year

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