Near Term Trend: ↓ (Down)
Market update: Nifty opened with a gap up of around 60 points at 10920 but saw selling pressure and immediately dropped below 10900. It traded whole day between a narrow band of 10860-10890 before closing at par (10860). I have been mentioning in my previous posts that Nifty has good resistance at 10900 (+/- 20 points) and today Nifty clearly showed that its not in a hurry to cross this zone.
Overall inspite of a big 350+ rise (from lows of 10530) in last 3-4 days, Nifty remains in a week trend ( hence the near term trend is still marked as down). There are many factor which are suggesting that this pullback from lows of 10530 is just a temporary/corrective bounce and Nifty should resume its downtrend once this corrective move is over. Just to share one factor with you, if you see the high point of last 3 days then you would notice that it was hit in first 30 minutes of trade. In last 3 days Nifty has failed to cross the high it touched during first 30 minutes of trading. This suggests 'lack of follow up buying' and that bulls are not ready to commit yet.Even though the lows are protected and markets are closing in +ve territory everyday, its not seeing fresh buying which should be a cause of concern for Bulls going forward. Having said that Nifty is still making higher highs and higher lows on daily charts suggesting some amount of strength in the market and that goes in favor of bulls.
We need to see a close below previous days low and follow up selling after that for next 2-3 trading sessions to conclude the down move has started now. Till then corrective move can continue and it can even extend.
Technically speaking, I believe market is still making (possibly) a diametric pattern which is currently in its last leg ( G), however the shape of diametric has now changed from 'bow tie' to ' diamond' ( pls visit this link to know what diametric patterns are and how they work) http://niftywaveindia.blogspot.com/2018/12/technical-learnings-7-legged-diametric.html
Overall this doesn't change anything about the markets and my view still remains same ( once this corrective leg is over then we might be heading towards lower levels)
Trading recommendation: No fresh trading recommended at this level. we are just holding on to our existing short positions. At appropriate time we will take fresh trading positions. If some one is long then he should exit/book profit at these levels.
Wish you a very happy new year!!
Market update: Nifty opened with a gap up of around 60 points at 10920 but saw selling pressure and immediately dropped below 10900. It traded whole day between a narrow band of 10860-10890 before closing at par (10860). I have been mentioning in my previous posts that Nifty has good resistance at 10900 (+/- 20 points) and today Nifty clearly showed that its not in a hurry to cross this zone.
Overall inspite of a big 350+ rise (from lows of 10530) in last 3-4 days, Nifty remains in a week trend ( hence the near term trend is still marked as down). There are many factor which are suggesting that this pullback from lows of 10530 is just a temporary/corrective bounce and Nifty should resume its downtrend once this corrective move is over. Just to share one factor with you, if you see the high point of last 3 days then you would notice that it was hit in first 30 minutes of trade. In last 3 days Nifty has failed to cross the high it touched during first 30 minutes of trading. This suggests 'lack of follow up buying' and that bulls are not ready to commit yet.Even though the lows are protected and markets are closing in +ve territory everyday, its not seeing fresh buying which should be a cause of concern for Bulls going forward. Having said that Nifty is still making higher highs and higher lows on daily charts suggesting some amount of strength in the market and that goes in favor of bulls.
We need to see a close below previous days low and follow up selling after that for next 2-3 trading sessions to conclude the down move has started now. Till then corrective move can continue and it can even extend.
Technically speaking, I believe market is still making (possibly) a diametric pattern which is currently in its last leg ( G), however the shape of diametric has now changed from 'bow tie' to ' diamond' ( pls visit this link to know what diametric patterns are and how they work) http://niftywaveindia.blogspot.com/2018/12/technical-learnings-7-legged-diametric.html
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| Nifty daily chart- Diametric pattern? |
Overall this doesn't change anything about the markets and my view still remains same ( once this corrective leg is over then we might be heading towards lower levels)
Trading recommendation: No fresh trading recommended at this level. we are just holding on to our existing short positions. At appropriate time we will take fresh trading positions. If some one is long then he should exit/book profit at these levels.
Wish you a very happy new year!!
read your blog is Great experience sir thanks Rahul ji this wonderful experience share with us
ReplyDeleteThank you sir, I am glad you finding the info useful
DeleteCan you please share your views on banknifty?
ReplyDeleteI dont really follow banknifty as such, but with whatever little i am observing I can see its in a big downtrend as well. I am bearish on Nifty (for now) and bank nifty is looking even worse. So I guess when Nifty falls bank nifty will fall more
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