Nifty Outlook and Trend for 31st May 2019

Medium Term Trend:  ↑UP (down below 11400)

Consolidation continues: Nifty Opened flat (inspite of a strong overnight fall in US stocks) but kept marching up for the entire day. There was no volatility and markets closed at 11945 ( up 85 points).

 

Nifty continues to consolidate and still remains in a tight range. On the election day result the high hit by Nifty was 12040 and low 11614, now even after almost a week, the high and lows hit by markets on that day hasn't been breached. I think this tight range bound trading is due to expiry related pressures. Before election results , the option premiums were pretty high and smart money probably has eaten up premiums on both sides ( a possibility we had mentioned long back before results came out).

 

Now that the expiry is out of the way, we should be seeing some movement (in either direction). Today inspite of a strong rally, markets have failed to cross the critical level of 11975 hence the possibility of extracting triangle ( which can have some bearish implications for short term) still stand. Also markets have still not been able to close above the 'dragonfly doji'  it made on Wednesday. This again is warranting some amount of caution at current levels.

 

Nothing much to update for now, caution is advised at current levels unless 11975-12K level is crossed and sustained on the downside one more (small or big) correction is possible from current levels. On the downside 11840 -820 is a crucial level now, if that is taken out markets can slip to 11700-650 levels once again but no danger to the current uptrend till the time 11400 holds.

  

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