Nifty Outlook and Trend for 20th May 2019

Medium Term Trend: ↓Down ( up above 11640)

Exhibiting Strength: Nifty put up a second straight day of impressive gains and added 150 points to close at 11407 levels.

We had mentioned yesterday that break of 11300 might lead to further momentum on the upside, Nifty broke above 11300 in morning session itself and kept moving up for the whole day and close around 11400 levels. Inspite of 2 solid days of performance by Nifty its a bit too early to say if Nifty is out of woods. Market has a solid resistance at 11420-11450 levels and Nifty not only needs to surpass it but sustain above it in order to have any chance of resuming its bullish trend.

On the downside 11300-320 levels should act as a good support now ( 11250-220 below that) and break of these levels might push Nifty back to 11100 -11065 or even lower levels.

We can go on and talk about all the levels but there are few times when no level matters and this is one of such times. In longer terms markets will always do what they want to do but in short term its movement will be governed by emotions ( which in turn will be governed by election outcome).

In such times its impossible to tell which way market is going to turn up and there is a strong possibility of Nifty giving a big movement on either side but at the same time there is also a possibility that Nifty will just stuck up in a range. Right now the call and put premium are pretty high and its possible that premiums on both sides will be eaten up and markets will move only after that.

One thing is for sure is that markets already has its eyes fixed on the target ( now that target is 13k or 10k we will know shortly) and irrespective of who comes to center, its overall movement will be in that direction only. Markets will always do what they want to do like in 2004 where it fell initially after BJP lost but then reversed and continued with the upward trajectory.

For now keep observing 11200-11500 range as break on either side might give us some hint on what markets what to do next.

Happy Trading