Nifty Outlook and Trend for 30th Apr 2019

Medium Term Trend: ↑(UP)

 

Market update: After witnessing a sharp fall on expiry day, Nifty once again rallied 100+ points and closed above 11750 levels.

 

Nifty now has filled the 'down gap' it had created previously ( 11720-11750) thus it seems its ready to touch higher levels now. However it has very strong resistance at 11810 & 11850 levels hence these are the 2 critical levels to watch out for in coming days. Crossing these levels should pave the way for higher levels in Nifty.

 

One thing worth mentioning is that entire rise started from 10800 levels ( though the low point is 10600 the wave started from 10800). since 10800 we have seen 3 rallies ( 4th one is in progress now)

 

1st: 10800 to 11550  = 750 points

2nd:11310 to 11760 =  450 points

3rd:11550 to 11860 =  310 points

4th: 11560 to 11795 = 235 points (in progress and 11795 was hit on Thursday i.e, on expiry) 

 

Now if you look at it time wise, then 1st rally took 13/14 days, 2nd took 7 days,3rd took 4 days and the 4th (current one) has completed 3 days.

 

So it can be observed that magnitude of rallies is getting shorter and shorter both pricewise and timewise ( traders appear in hurry to book profits) at the same time the lower levels around 11550-11625 continue to see buying. Each subsequent rally is around 65-80% of previous rally. Such a scenario might be indicating that probably markets are losing strength slowly.

 Hence one should continue to be cautious and keep a close eye on 11800-1870 levels to see if the current rally remains shorter than previous one or become bigger and start a new trend. Move above 11870 ( which is also the previous high) will negate the current structure and will probably give a new thrust to the upmove we are witnessing currently. This is a short week ( just 3 days) so that's another reason to stay cautious.

 

Happy Trading!

 

 

 

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