Near Term Trend: ↔ (sideways with a downward bias)
Market update: Nifty opened at par after two days of heavy selling but drifted below 10600 and touched 10583 before some late buying coupled with short covering lifted the index and it closed just 10 points down at 10652 levels.
We had mentioned in yesterdays post that Nifty is appearing slightly oversold on the short term charts so a pullback/consolidation at these level is expected. Also it was the 6th day of consecutive fall in Nifty today and as the case has been since last 3 months, Nifty has max fallen ( made lower lows) for 6 days in row. A similar script played out today as well and after falling 70-80 points Nifty saw some pull back. Market has been directionless since last 2-3 months and there is a counter moves of bulls and bears taking place which last for 4-6 days in each direction. Now it will be interesting to see if Nifty can sustain the upmove/pull back it witnessed today and bulls take over for next 4-5 days. In other words we need to observe if market is playing the same script or it changes it.
Even though Nifty made a new low today and was trading weak throughout the day, the last hour pullback does give some hope to bulls and there still remains a possibility of Nifty moving up from these levels however it has considerably weakened now. Yesterday Nifty broke 10694 which was the previous swing low and today it broke below 10630 which was an earlier swing low. So Nifty has been making lower lows. Now the next swing low is sitting at 10530 levels and below that we have 10340 levels ( low made on election day result) which should be the final support for bulls. We had mentioned yesterday that another weak day will probably confirm that near term trend has now changed in favor of bears however even though we saw some weakness, it wasn't conclusive enough so we need more evidence to confirm that the trend has actually changed to down now ( for now it remains a strong probability).
Coming few days could be critical for Nifty, considering that budget is just round the corner there could be some spike in volatility ( as usually happens during budget). So traders are advised to keep positions light till then. continuous weakness from here below 10540 levels would suggest that trend has probably changed for time being. On the upside, 10750-10800 levels is likely to give stiff resistance. PCR (0.83)is totally in favor of bears at the moment so pressure is likely to continue till expiry atleast. Bulls can take heart from the fact that Bank Nifty (even though is looking pretty weak) is giving a positive divergence ( for now). Also the market breadth was positive today and advance decline ratio was a healthy 31:19.
Trading recommendations: Same as yesterday, There is a possibility that markets have started a new down leg at the same time since market is already fallen for 6 days & the pull back we saw today can be extended for another 2-3 days. Also the volatility is likely to pick up in short term because of budget. So if one must trade, trade light and trade with strict SL.
If you wish to subscribe to our live whatsapp Nifty trading updates/trading recommendation during trading hours then you may subscribe using below link:
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Market update: Nifty opened at par after two days of heavy selling but drifted below 10600 and touched 10583 before some late buying coupled with short covering lifted the index and it closed just 10 points down at 10652 levels.
We had mentioned in yesterdays post that Nifty is appearing slightly oversold on the short term charts so a pullback/consolidation at these level is expected. Also it was the 6th day of consecutive fall in Nifty today and as the case has been since last 3 months, Nifty has max fallen ( made lower lows) for 6 days in row. A similar script played out today as well and after falling 70-80 points Nifty saw some pull back. Market has been directionless since last 2-3 months and there is a counter moves of bulls and bears taking place which last for 4-6 days in each direction. Now it will be interesting to see if Nifty can sustain the upmove/pull back it witnessed today and bulls take over for next 4-5 days. In other words we need to observe if market is playing the same script or it changes it.
Even though Nifty made a new low today and was trading weak throughout the day, the last hour pullback does give some hope to bulls and there still remains a possibility of Nifty moving up from these levels however it has considerably weakened now. Yesterday Nifty broke 10694 which was the previous swing low and today it broke below 10630 which was an earlier swing low. So Nifty has been making lower lows. Now the next swing low is sitting at 10530 levels and below that we have 10340 levels ( low made on election day result) which should be the final support for bulls. We had mentioned yesterday that another weak day will probably confirm that near term trend has now changed in favor of bears however even though we saw some weakness, it wasn't conclusive enough so we need more evidence to confirm that the trend has actually changed to down now ( for now it remains a strong probability).
Coming few days could be critical for Nifty, considering that budget is just round the corner there could be some spike in volatility ( as usually happens during budget). So traders are advised to keep positions light till then. continuous weakness from here below 10540 levels would suggest that trend has probably changed for time being. On the upside, 10750-10800 levels is likely to give stiff resistance. PCR (0.83)is totally in favor of bears at the moment so pressure is likely to continue till expiry atleast. Bulls can take heart from the fact that Bank Nifty (even though is looking pretty weak) is giving a positive divergence ( for now). Also the market breadth was positive today and advance decline ratio was a healthy 31:19.
Trading recommendations: Same as yesterday, There is a possibility that markets have started a new down leg at the same time since market is already fallen for 6 days & the pull back we saw today can be extended for another 2-3 days. Also the volatility is likely to pick up in short term because of budget. So if one must trade, trade light and trade with strict SL.
If you wish to subscribe to our live whatsapp Nifty trading updates/trading recommendation during trading hours then you may subscribe using below link:
http://niftywaveindia.blogspot.com/2019/01/join-us-on-whatsapp-how-to-subscribe.html
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