Nifty Analysis: Outlook and Trend for 22nd Apr 2020

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

Nifty Tumbles: Weak global cues and weak crude forced Nifty to open with a gapdown around 9K levels. It further fell towards 8900 levels but managed to pull back to 9k levels again just before close.

9100-9150 was a good support for Nifty it was expected to hold and below it levels around 8900 were expected and Nifty almost achieved those level today itself. But since 9100 is broken now lets see where do we stand now.

Below is the 30 min chart of Nifty:

Nifty 30 min chart

Inspite of breaking below 9100, Nifty is managing (till now) a higher low on the charts. Its only below 8850 that we will have a lower low. Another thing to watch out for is the positive divergence with RSI. Todays fall is not supported by RSI and it already dropped to levels last seen 8-10 days back when Nifty was trading around 8k levels. Both these things are positive .

One bad thing however is the 'island reversal' which appeared today on the charts, Previously (last Friday) nifty had opened with a gapup (from9000 to 9300) and today same gaup-up area is taken out by a gap-down. If todays gap-down area is not filled in next 2-3 trading session then it could have strong bearish implications.

Overall markets continue to see weakness emerging from 9100-9300 levels and inspite of hitting higher highs, buyers confidence is not returning but mind you it can change anytime.

For now if market manages to protect previous low sitting at 8850 levels and also fill todays gap-down (means move back above 9100 levels) then the chances of resuming uptrend will become strong again. Levels around 9300 are not invincible and markets have spent so much times there already hence ideally it should be broken on the upside ( timing However is something only market knows).

So in summary, 9100 was a crucial level and even though markets have moved below it, all is not yet lost for bulls. For a bullish scenario to play out from here, the lows around 8850 should hold and nifty should move back above 9100 level. If that happens in next couple of trading sessions then move towards 9500-10k levels is likely. Movement of last 8-10 days is looking like a channeled movement and probably a complex corrective and Nifty is likely to move higher once this corrective gets over. On the downside move below 8850 levels could push Nifty towards 8700 and break below 8700 could be really bearish for Markets.

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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

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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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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 Buy/Sell Algorithm