Nifty Tomorrow: Prediction, outlook and Trend for 26th July 2021

Medium Term Trend: ☝ UP (Changes to down below 15400)

 Nifty @ 15920 - Breakout is likely round the corner.

In previous post we had mentioned that the way Nifty has crawled above 15900 levels ( intraday and not with a strong thrust or gapup), there is a chance that this breakout proves to be a false one and Nifty once again drops in the sideways range. Thats exactly how its played out and next three days Nifty was back at 15600 levels. However in one of the older post ( for 13th July) we had also mentioned that-

"From a bullish standpoint, that will be an ideal scenario. Market goes down below 15650, traps bears and then make a sharp move back towards 15800-15900"

 From what we have seen during last couple of trading sessions, I wonder if the above scenario is beginning to unfold now. In a way what we were expecting then is probably happening now. For a bullish move to begin its important that weak long hands are thrown out and probably thats what market achieved when it made a sharp dip below 15600 levels on Tuesday and equally sharp recovery is also indicating that now market has made up its mind to move beyond 15900. We had also posted one Nifty intraday chart few days back suggesting that correction probably got over as 5 legged ABCDE triangle however that too warrants a change now since its proven that breakout was a false breakout. Below is the updated count. 

Nifty Daily

As per updated count the correction is folding as a complex corrective ABC-X-ABC (where in first corrective pattern was regular zigzag and second was irregular). Now the thing about complex corrective is that they can develop as triple three correctives as well .Chances of a triple three are less though but in case even now Nifty fails to move decisively above 15900 then that could mean ABC-X-ABC-X-ABC is undergoing which means markets could continue to trade sideways for atleast 2 more weeks. But like I said earlier, chances are less and its likely that we are very near to a decisive breakout. The fact that weekly closing has come below15900 is infact a good sign for bulls. From a bullish standpoint it will be great if this level gets broken with a sharp thrust/gapup next week.

In Nutshell, it appears as if Nifty is close to giving a decisive breakout above 15900 in next week and watch out for a strong trading session early next week. Having said this, if we see continue to see lackluster move next week too then its likely that 3rd leg of corrective start developing and we spend 2 more weeks in this range but this is our least preferred scenario for now and we expect markets to make a decisive move on the upside soon and we advise traders to hold on to their long positions (with proper SL ofcourse).

Happy Trading!

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Nifty Tomorrow: Prediction, outlook and Trend for 19th July 2021

 

Medium Term Trend: ☝ UP (Changes to down below 15400)

 Nifty @ 15920 - Much awaited breakout ??

In previous update we had posted a daily Nifty chart and had mentioned that its possible that some sort of bottom is done around 15650 levels and we see Nifty moving above 15900 in next 3-4 trading sessions. Nifty did exactly that and we have had a weekly close above 15900 now. Intraday Nifty even hit a high of 15950+ levels.

Having said this, since the breakout has come intraday (in a slow manner) and not with a strong gap-up, there is a chance that this breakout proves to be a false one and fizzle out in next few days and Nifty drops in the range ( 15500-15900) once again. One need to keep a close watch at 15850-15900 zone, this area has been broken out after much effort and a long time so ideally Nifty should now trade above it and move higher. In case Nifty start trading below it ( today it threatened to do so for some time but then bounced back)  then that will not be a very positive sign.

So will keep it short for today, in summary, though Nifty has moved above 15900, the manner in which it has moved is not inspiring much confidence. To confirm its bullish stance Nifty needs to move strongly above 15900. If Nifty fails to do that and bears manage to drag it below 15850 once again then its likely that breakout we saw yesterday/today was not actually a breakout but a mere expansion of the sideways range. Next week is a truncated week ( just 4 days of trading) and probably will confirm if its an actual breakout or just a false one. Till then be cautious and dont be greedy. 

Happy Trading!

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Nifty Tomorrow: Prediction, outlook and Trend for 14th July 2021

 

Medium Term Trend: ☝ UP (Changes to down below 15400)

 Nifty @ 15810 - Sideways trend ending soon?

One quick update from yesterday, In previous post we  had mentioned :

"From a bullish standpoint, that will be an ideal scenario. Market goes down below 15650, traps bears and then make a sharp move back towards 15800-15900 (just one of many scenarios which can play out)" 

Looking at how market traded today, the probability of the above scenario unfolding is looking weak now. Its possible that market has made some sort of base/completed short term correction  yesterday at 15650. lets look at the chart below to understand.

Nifty Daily

 Since 14th June (the day this sideways correction started) market has spent around 4-5 days going up and then 4 days going down , yesterday market finished 3rd day of down-move and today was the fourth day and market has finished in positive territory so its possible that the last down-move finished in just 3 trading sessions. Nifty's inability to break below 15650 today could be pointing towards another up-move which should last for next 4-5 days atleast and take Nifty above 15900. Also the entire move since 14th Jun is looking like a contracting triangle (which finished yesterday at 15650). If this pattern reading is true then market can post some strong gains in coming days.

In case Nifty fails to take out 15900 conclusively in next 3 trading then its possible that correction continues still and pattern is developing into something else ( and not 5 legged triangle).

Happy Trading!

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Nifty Tomorrow: Prediction, outlook and Trend for 13th July 2021

 

Medium Term Trend: ☝ UP (Changes to down below 15400)

 Nifty @ 15700 - Sideways trade continues (Support at 15650 resistance at 15900)

The game of sideways trade continues and market continues to frustrate traders. Market is stuck in a very small range and traders are getting restless now. However traders should understand that sideways trades are as much part of the market as upswings and downswings are and its totally fine and normal and infact healthy for markets to trade sideways.

Also, market cannot and will not remain in such a limbo forever and sooner or later it will break out ( or break down). Instead of wasting ones capital and energy on such sideways/nothing trade, one should rather sit out and wait for right time to enter. But most traders lose lot of capital in these sideways trade (usually option buyers) and the when the actual breakout happens, they have very little capital and energy left to make a fresh trade.

Now like 15900, this level of 15650 has been tested too many times and its likely that market breaks it and drop down further towards 15500 levels in next couple of trading sessions. When markets stuck in tight range its not unusual to see a false break out first. Now I am not saying that market is going to give a false breakdown below 15650 but its possible. Incase market goes down below 15650 then one needs to observe if its sustaining below it. Below 15650 next support is at 15500-550 levels and only when market start trading below 15500 can we conclude that actual breakdown has taken place otherwise it could just be a bear trap.

From a bullish standpoint, that will be an ideal scenario. Market goes down below 15650, traps bears and then make a sharp move back towards 15800-15900 (just one of many scenarios which can play out). Will have to see how market plays in next few trading session. A break below 15500 in next 1-2 trading sessions could inflict a bigger damage on the charts but till that happens, I continue to believe that markets are likely to head higher eventually (whenever this correction gets over).

Happy Trading!

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To see our recent trading calls for Nifty Algo- Pls click ⤇ Past Trade Summary (updated till 21st Jun).  

 

Nifty Tomorrow: Prediction, outlook and Trend for 7th July 2021

 

Medium Term Trend: ☝ UP (Changes to down below 15400)

 Nifty @ 15820 - Facing stiff resistance at 15900

Now its been more than 20 trading sessions that Nifty has failed to close above 15900. Every time market touches 15900 we see some kind of sell-off which again take nifty down however nifty is not falling much either and its just stuck in a range of 15900-15600.

Now everyone knows that the obvious trade is to sell Nifty at 15900 and buy at 15600. The thing about obvious trade is that when everyone knows about them ( hence obvious) then they seldom works. Market cannot trade in such a narrow range for long and sooner or later it has to break it and as per our analysis the chances of market breaking on the upside is much much higher.  We have seen such scenario playing out multiple times in the past and whenever resistance is a fixed point ( like 15900 in this case) markets have broken above it. Its possible that we spend some more time in this range but eventually market is going to break it.

In such cases, many times, the breakout takes place with a gapup (or gapdown in case of breakdown) opening. Market wouldnt want traders to buy when it finally decides to make a move above 15900 levels so its a possibility that market opens above 15900 with a strong gapup some day. Fall from 15900 intraday today therefore is not a surprise and probably thats not how market is planning to take this level down.

On the downside we have seen 15600-650 is a strong support for now and below that 15450 levels. Its looking unlikely for now that market will break these levels in immediate future.

In Nutshell, trading in a range is possible for a few more days but eventually market is expected to break above 15900 and head higher. This level of 15900 is tested too many times and now has to break, we will be really surprised if markets make some kind of important top around this zone. If the breakout happens with  a gapup then it will indicate that markets are very strong. On the other hand if the breakout is slow and happens intraday then we need to be watchful for it could be a bull trap in the making.

Happy Trading!

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Nifty Tomorrow: Prediction, outlook and Trend for Next Week (28 Jun-02nd Jul 2021)

 

Medium Term Trend: ☝ UP (Changes to down below 15400)

 Nifty @ 15860 - Market Resumes Uptrend

Last week we saw Nifty dropping to 15500 levels and moving back again towards 15900 levels. Though it was a range bound move, nifty failed to break below 15450 levels and held on it and move back towards 15900 levels which suggests upmove is still intact and Nifty is likely to move towards 16K and beyond.

Last week we had discussed "if we see positive open on Monday and Nifty sustains above todays high then its likely that correction is already over as ABC irregular (secnario-1) and Nifty moving towards higher level and on the other hand if we see a gap-down open & strong fall below 15450, then scenario B is playing out (which is a bearish scenario) and could take Nifty below 15K levels" 

Nifty opened weak on Monday (due to weak global cues) but held 15450 which we had mentioned as the crucial support going forward. Seeing Bears inability to take market below 15450 Bulls once again got active and they not only succeeded in defending 15450 but took markets back towards 15700 on the same day itself and subsequently moved towards 15900.

Last couple of weeks markets were appearing a bit overbought but this consolidation has ensured that this is not the case anymore and markets are not in so much overbought zone now. Trading wise we had clearly mentioned if Markets make a move above 15700 then its strong and hence only long trade should be initiated. Markets are already 150+ points from 15700 and moving forward its highly likely that resistance area of 15900 will give away sooner or later and markets will make a move towards 16k+ levels. Support area is now shifted to 15650-700 levels and till the time it holds the short term trend is likely to remain positive. 15900 has been tested enough times and is not likely to hold for long now.

Happy Trading!

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To see our recent trading calls for Nifty Algo- Pls click ⤇ Past Trade Summary (updated till 21st Jun).  

 

Nifty Tomorrow: Prediction, outlook and Trend for Next Week (21-25th Jun 2021)

Medium Term Trend: ☝ UP (Changes to down below 15400)

 Nifty @ 15683 - Sideways trade

Current week was a tad volatile, initially we saw a drop towards 15600 then Nifty rose and touched 15900 only to drop towards 15450 today & then recover sharply & close at 15700 levels.

Overall Inspite of the volatility Nifty has just closed flat but the movement we saw during last few days is very interesting and probably next couple of sessions will help decide if Nifty has made an intermediary top at 15900 levels or mkt will continue to rise & move beyond 16K+ levels. We had always maintained and mentioned in the last post that markets were overbought and negative divergences were also visible on the charts however there was no weakness on the price charts and  charts were still looking good and strong. Now what this movement (last week) has done is that it has brought weakness to the price charts too. Bears got very close to turning tables on bulls but were prevented in the end (thanks to last hour pull back). Now moving forward we see two possibilities.

A) Bullish Scenario: Last 5-7 days movement has played out like an irregular corrective pattern, drop towards 15600 earlier in the week was A leg, then move to 15900-B leg and move towards 15450 today was C (last leg). Once C leg got completed, market opened a fresh leg on the upside and moved sharply towards 15700. If this assumption indeed is correct then market is likely to continue moving up and move beyond 16K levels soon. To confirm this scenario Nifty should sustain above 15730-750 levels on Monday ( just above todays high) & then move above 15800. 

B) Bearish Scenario: This scenario assumes that market has hit  a short term top around 15900 last week and a fresh corrective move has started from there. Fall we witnessed on Wednesday, Thursday & first half today supports this theory very much. Its just the sharp pullback we witnessed in second half which contradicts it. However it is important for Nifty to break below 15450 (Sensex 51500) soon. While Nifty bounced back exactly from 15450, Sensex hit a low of 51600. In short, if we see a drop towards 15450 again in next 1-2 trading session then its highly likely that this scenario is playing out hence trade accordingly. At the time of writing this post, DOW is trading 400 points down so anything is possible.

In Nutshell, if we see positive open on Monday and Nifty sustains above todays high then its likely that correction is already over as ABC irregular (secnario-1) and Nifty moving towards higher level and on the other hand if we see a gap-down open & strong fall below 15450, then scenario B is playing out (which is a bearish scenario) and could take Nifty below 15K levels. 

Next week (initial 1-2 days specially) could be very crucial hence be alert and trade wisely, lot of points could be up for grabs, if, as a trader you keep patience and trade wisely.

Happy Trading!

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To see our recent trading calls for Nifty Algo- Pls click ⤇ Past Trade Summary (updated till 19th Apr).