Nifty Outlook and Trend for 14th May 2019

Medium Term Trend: ↓Down ( up above 11640)

Market update: 9th Day & counting- Nifty fell yet again and its going worse day by day. It fell by another 130 points to close at 11148 levels.

 

Bear sentiments continue to rule and are getting stronger by the day. Seems like markets are now factoring in a weak BJP govt at center. However today markets have completed 9th straight day of fall ( which is nearing a record streak) but the problem market is now facing is that after falling for so much even a pullback wont be able to push it up much higher.

 

11200-220 was a key support zone for markets and today for a brief moment it touched 11220 and moved to 11275 levels but a sharp reversal from there pushed Nifty below 11200 and once it broke there was a free fall all the way to 11130 levels in a matter of minutes.

 

Now the next key level ( and its the last support level) is at 11060-11110 range. This was the previous swing high of Nifty and also the break out point of this rally hence should offer some support(again to which extent that remains to be seen). if this level is taken out then even the long term trend line will change to down. Seeing how the markets have been behaving in last few days its a very strong possibility now.

 

At the time of writing this post Dow future is down by almost 500 points, now since last couple of days dow is recovering from its day low and putting up a smart recovery however it will be difficult to do the same 3rd day in a row. In case we have a bad day in Dow tonite and global markets again open weak tomorrow then Nifty probably will again open in red. If Nifty opens down but hold on to 11100 levels or opening lows then some amount of buying ( purely momentum) can be done in 11060-11100 range ( keeping a strict SL of 11040).

 

On the upside Nifty is likely to face a very stiff resistance in 11350-11400 range now and further gains are expected once 11400 level is taken out now.

 

Just to count few positive, daily RSI has touched 30 and generated a positive divergence on the chart, similarly a positive divergence is also seen on hourly charts (but remember divergences on chart can continue for a long time). Nifty OI continue to remain around 1.7crore which is pretty low and it didn't add any open interest even today.

 

For now keep an eye on 11060-11100 level which is the last support for this entire move and if we do see any bounce or pull back then we need to observe if Nifty is able to take out 11350-11400 zone.

 

Happy Trading!