Nifty Tomorrow: Prediction, outlook and Nifty Trend for 31st Jan 2022

 Medium Term Trend:👇(Down)

Nifty @ 17100- Closed flat

Nifty opened on a positive note & was 250 point + at one point however selling pressure emerged once again and markets gave up all the days gain to close up flat. In the process market formed a 'shooting star' pattern on the charts and it can have strong bearish implications in case we see follow-up selling on Monday (below todays low).

In last post we had mentioned that overall markets seems to be in a range but the range seems quite big (16500-18500). Now looking at charts its possible that we may fall towards the lower end of this trading range (especially if we see weakness below 17K levels on Monday/Tuesday). hence we have changed the medium term indicator to 'Down' for the time being. There are more negative points than positive points on the chart so its better to pick a side instead of waiting on the sidelines.

Now lets talk about some of the points which are bothering us. Firstly, there was a strong pullback which started yesterday from the lows of 16850. Now markets have made a double bottom at 16850 which is a positive sign had market continue to move up from there. After a vicious fall of 1300-1400 points from top, 3-4 strong trading sessions were expected of markets, instead Nifty succumbed on 2nd day of pullback and its failure to hold on to its intraday gain today suggests weakness is still there and same also indicates that probably one more leg of selling is still pending.

We consider levels of 17450 as the 'breakdown' level of this fall, selling had intensified & turned ugly once this level broke early this week. It was important that Nifty had moved back above this level to regain some of the lost ground. However todays fall (even though markets just closed flat) from just below 17400 levels indicates that 17400-450 is now turning into a significant resistance and unless Nifty climbes back above it, theres is risk of markets moving back below 17K levels.

Another thing worth noticing is how markets expired yesterday. Some pull back from 17850 levels came at just the right time as if to give the incentive to buyers to roll over/ carry forward their position to next month series. Now there is a growing consensus in the markets that there exists strong support in the 16800-17000 zone which worries me a bit. Any support or resistance level which is known to everyone hardly ever holds.

In summary, looking at the way market has traded in the last 2 days, theres a probability emerging that another round of selling is possible from current levels which could take markets below recent lows (16800 levels). Hence caution is still warranted and bottom fishing should be avoided for time being let market build/show some strength ( move above 17450-500) before concluding that worst is over. 

Happy Trading!

Nifty Tomorrow: Prediction, outlook and Nifty Trend for 27th Jan 2022

Medium Term Trend:👈👉 (Sideways)

Nifty @ 17275- Crashed 1300+ points in 6 days.

In last update, we had shared that we saw two possibilities emerging from here ' A- market makes a V shape recovery and shoots above 18500 levels or B- mkt consolidate between 17400-18500 levels for few more weeks' We had also mentioned that the other scenario where market fall below 17K level is our least preferred scenario and in case it happens we will relook at our options.

As it played out, our analysis was proved wrong & Nifty weakened below 17400 levels yesterday, tested 17K levels and today it even broke below 17K levels (though temporarily) before staging some sort of recovery and closing around 17300 levels. But now since market has convincingly broken below 17400 levels, its important that we re-analyse the whole scenario in the new light.

Fall we have seen in last few trading sessions has been pretty sharp with VIX rising sharply. Domestic (budget/elections), Global (Fed meet) & Geopolitical (Ukraine/Russia) events have taken center stage and playing out with the markets & traders sentiment. However inspite of such a brutal fall, we still would like to stick with our second option (i.e, option B- range bound trade) though with a revised range.

For now it appears market wants to trade in a sideways range (between 16500-18500 on a larger scale and 17000-18000 on a slightly smaller scale). We had previously noted ( ref  Nifty 20th Dec Update) that fall from 18500 to 16500 was extensive and broad based & its not uncommon to see market going in for an extended period of consolidation post such moves. So we wont be surprised to see market moving in this range of 1000-1500 point for few more weeks. 

Moving forward, it is likely that markets more or less has priced in these events, and unless global situation deteriorates severely, we do not see sustainable fall below 16700 levels. There could be flash trades (like today) but eventually market should be able to move from there. Moving above key resistance of 18000-18500 however will take some doing and wont be easy.

In Summary, inspite of the carnage we have seen in last 6 days, we maintain our 'Neutral' stance & not turning bearish yet. From trading perspective it makes sense to sit out for some time (or trade with light quantities). Scenario is likely to become clearer in coming trading sessions.

 Happy Trading!

Nifty Tomorrow: Prediction, outlook and Nifty Trend for 21st Jan 2022

Medium Term Trend:☝/👈👉 (UP/Sideways with upward bias)

Nifty @ 17757 - Nifty loses 600+ points in 3 days

Before we start analyzing markets, lets see what we had discussed last time around in previous update.

2nd Jan- "it may or may not run away above 18K and 18500 levels in a hurry and might just consolidate between 17-18K levels for some more time but the bias and trajectory even in that scenario is likely to remain on the UP or positive side"

When markets were trading below 17K levels we were clear in our analysis and had mentioned that downside seems to have played out and markets can move towards 18000/500 levels (it may or may not cross those level anytime sooner). Now even today we maintain our stand, even though markets have shed about 600 points in a matter of few days nothing has changed still. From here two options are likely to playout.

A) Market start making quick V shape recovery in coming trading sessions and move strongly above 18500 levels and touches 19K an beyond.

B) Market consolidate between 18500-17500/400 levels ( in a 1000-1200) point zone for few more weeks and then make a breakout.

There is a also a third option that market once again falls below 17K levels ( which is our least preferred scenario for now hence we are not considering it for time being. If we see sustained selling/weakness below 17500/400 levels then we will have a relook at our options again and post the update here.

In Summary, both the options mentioned above are positive and highlights the underlying strength in the markets hence trades can be taken accordingly. Till now we have not seen any reversal on the charts which suggests that we need to change/modify our stand (it is too soon for that). Its likely that market is 'adjusting' itself for the upcoming big event (Budget) hence some rise in volatility is totally expected. As a trader one has to be quite nimble capable of making a quick entry and exit and as always, its prudent to reduce qty slightly before such an event.

Dont try and predict market, always react to it.

Happy Trading!

Nifty Tomorrow: Prediction, outlook and Nifty Trend for 03rd Jan 2022

 

Medium Term Trend:☝/👈👉 (UP/Sideways with upward bias)

Nifty @ 17350 - Downcycle over & Nifty adding strength

In the last update, I had mentioned that "in both scenario it seems either markets have already opened a new leg on the upside or it will open the same on Monday" & "Time is running out for Bears and if they fail to act in next 1-2 trading sessions then its likely that Bulls can once again start controlling the markets"

Now in last 5 trading sessions ( since last update), market has added 350+ points. Nifty had dropped below 17900 levels on last Monday in a flash trade but it was for a very brief period and after that market has not looked back and is now adding strength (suggesting that down-move seems to be over now) which is exactly in line with my broad analysis.

Like I mentioned earlier, time seems to have run out for Bears and Bulls seems to have taken control of markets and if some are still holding on to their shorts expecting levels of 16500 or below then they are likely to be disappointed. As per me it is highly unlikely that markets will fall towards those level again now.

Overall market is looking strong and positive but since the damage we have seen in last 2-3 months was extensive, it may or may not run away above 18K and 18500 levels in a hurry and might just consolidate between 17-18K levels for some more time but the bias and trajectory even in that scenario is likely to remain on the UP or positive side. Trade should be executed on long side (preferably buy on dips) instead of sell on rise.

Happy Trading & A Very Happy New Year!!

Nifty Analysis Tomorrow: Prediction, outlook and Nifty Trend for 27th Dec 2021

 

Medium Term Trend:👇 (Downswing maturing)

Nifty @ 17003 - Nifty Finishing 10 day Downcycle and Managing close above 17000

In the last update, I had mentioned that "it remains to be seen if Nifty manages to move back above 16800-17K levels. Chances are that price wise correction seems to have completed and what we are seeing is just an exaggerated move on the downside which could reverse in a similar fashion in coming trading sessions (when I say reverse I mean move back above 17K levels and not necessarily above 18500 levels).

So after 3 consecutive close just below 17000 levels, Nifty has managed to make a move above 17K levels again and more importantly the weekly close has also come above it which is positive indeed. Another important thing to note is that the lows of Monday were protected and not tested again which suggests that fall witnessed on Monday was just an exaggerated fall or an excess move or a false break on the downside (now that market has moved back above 17K levels).

16900-17K levels was a good support and if the market was actually planning an extended bearish move then ideally it should not have been tested again (let alone mkts trading above it).

We had also highlighted how market is following a 9-10 day cycle of up-moves and down-moves since last 2 months & looking at the charts it seems either the last down-move finished in just 6 days (Monday) or in a irregular move in 10 days (today). In both scenario it seems either markets have already opened a new leg on the upside or it will open the same on Monday.

Overall market still seems to be in Bear trajectory but its hanging just by a thread and can breakout any time. Time is running out for Bears and if they fail to act in next 1-2 trading sessions then its likely that Bulls can once again start controlling the markets.

We may or may not see a runaway rally (as I had pointed out in the last update as well) but even if its a sideway move from here, it will be a sideway move with a positive bias ( where markets slowly but surely be moving up).

Happy Trading!

Nifty Analysis Tomorrow: Prediction, outlook and Nifty Trend for 21st Dec 2021

 

Medium Term Trend:👇 Down

Nifty @ 16614 - Blood Bath after Black Friday

In the last update, when Nifty was around 18K levels I had mentioned that.." fall towards 17500/600 (or even a bit lower towards 17K) is very much possible in the current wave".   Nifty tested 17K levels in Nov end and attempted a recovery and moved towards 17500 levels but could not sustain above it and in a matter of 4-5 days has fallen >1000 points towards 16500 levels.

I had also mentioned that I am not expecting any major sustainable fall below 17K levels (based on time cycle study) however today market has convincingly broken below 17K levels which might change things a little bit going forward. Having said this its just one day and it remains to be seen if Nifty manages to move back above 16800-17K levels. Chances are that price wise correction seems to have completed and what we are seeing is just an exaggerated move on the downside which could reverse in a similar fashion in coming trading sessions but one must not try to do bottom fishing and and from trading perspective it make sense to not indulge in long trades for time being ( when I say reverse I mean move back above 17K levels and not necessarily above 18500 levels)

Nifty Daily

In the daily chart above it can be seen that Nifty is following a 9-10 days cycle for each up and down leg. Entire downmove from 18500 level can be read as 5 legged ABCDE and we seem to be in E leg which is in 6th day of fall. Going by the current cycle its likely to continue for another 3-4 trading sessions and after that we might see some sort of recovery. 

Important thing is that since the fall has taken 5 legs , markets may not move back above 18K levels in a hurry and can instead go in for another sideways/corrective mode (preferably between 17K and 18K levels) which might last for another 8-10 weeks. If the fall was a 3 legged fall and markets had made the bottom in Nov end towards 16900 levels then we could have expected a new high soon but now things might get delayed. Overall view remains bullish but it remains to be seen if we see a lot more sideways trading between 17-18K levels for next couple of months.

Similar situations had played out in 2019 too ( see below chart) after a severe fall markets went into a long sideways consolidation. It remains to be seen if same scenario is repeated in 2021-22 as well. 

Nifty Daily (Sep19-Mar20)

There is a strong probability of one thing though, after next 3-4 trading sessions we may not see such exaggerated moves on the downside anymore and that could be the end of this downcycle. It may or may not move towards new highs but its not likely to break down further from current lows.

Happy Trading!!

Nifty Analysis Tomorrow: Prediction, outlook and Nifty Trend for 17th Nov 2021

 

Medium Term Trend: 👈👉 Sideways (with Negative Bias)

Nifty @ 18000 - Sideways Trend /Negative Bias continues

Due to personal reasons and time constraints couldn't update the blog for last few months so apologies however going forward will try to update blog once a week atleast.

Market has been in a sideways trend for last few weeks and many traders are on the bullish side expecting markets to break above 19K and similarly there are many traders who feel market has seen a decent rally and is due for a healthy correction which could take Nifty to 16K levels. Market has been disappointing both sides and just trading in a narrow band between 18500-17500. Options premium (on both sides) are seeing time decay and buyers (calls as well puts) are bleeding slowly.

Now many feel market has been in sideways to negative trend for last couple of weeks however as per my analysis it seems markets are in sideways trend since Sep 25/26 ( since it hit a high of 17980 levels). Now even though market hit a new of 18500 after that, it still was part of consolidation only. Charts are indicating that market reached some sort of 'maturity' zone near around 18000 in Sep end itself. This flat trading and sharp whipsaws we are witnessing since then are part of this consolidation only.

Nifty Daily chart

In the chart above can be seen that markets were at 18K levels on Sep 26 and even today markets are at same level. Also from 18500/18600 levels we saw a fall which lasted for ~9 days and brought Nifty to around 17600 levels ( ~ 1000 point fall). Now in last 10 days we have corrected the same by ~61.8% price wise which is raising the possibility of one more fall towards 17600 levels (or lower) in the days to come.

Good thing is ~7 weeks have already passed and markets are still trading near 18K only which rules out the chances of any major crash from here ( if any major crash had to come then it would have come by now) however it does not mean we cant fall a little more from here. A fall towards 17500/600 (or even a bit lower towards 17K) is very much possible in the current wave.

Historically speaking, we have seen markets spending 7-10 weeks in similar conditions undergoing consolidation & now that we have already spent ~7 weeks already then it is possible that we are nearing the end of this sideways consolidation. Having said this, like we mentioned above , its also possible that one final leg on the downside is pending & it could be sharper than what we have seen till now ( just to frustrate/scare away remaining buyers) and takes mkt towards/below 17500 levels.

Thats the view for now, if there is any change then will post the update in coming days.

Happy Trading!