Friday, July 12, 2019

Nifty Analysis, Outlook and Trend for 15th Jul 2019

Medium Term Trend:   Down (Up above 12010)

Trades Flat: Nifty opened around 11600 today and went on to touch 11640 but soon selling emerged at 11640 levels and pushed Nifty all the way back to 11540 levels and markets closed down 30 points at 11552.

As we have been mentioning that Nifty has good resistance in 11610-640 zone and Nifty needs to conquer this level in case it wants to resume uptrend. Todays the high touched by Nifty was 11639.5, this in itself explains the importance of levels mentioned by us.

Today markets may have crashed 100 points from day high but inspite of that Nifty has a higher high and higher low on daily charts ( and Nifty is doing that for last 3 days). Yesterday we had mentioned the importance of 11500 zone and even today the same view stands. Incase markets wants to push from here then it needs to hold 11500-525 levels, further weakness below this level can push nifty all the way back to 11350-400 levels.

Another thing we mentioned yesterday that Nifty OI was pretty light at 1.75 crores, now the same has further reduced to just 1.69 this is extremely low. Historically we have witnessed that markets find difficult to fall much when its trading light. Perfect example is just before exit poll result, we had mentioned same thing even then (when nifty was around 11100 levels) and everyone saw what happened after that. Now we are not saying markets cannot fall from here, it can easily fall by another 200-300 points but the point is blind shorting at this stage is not recommended and one should be prepared for a counter trend by bulls at all time.

Today the fall from 11640 was pretty sharp and there is chance that markets tempted Bears to enter into fresh short positions towards the close of play. However if markets continue to fall and break below 11500 levels then it would be a different scenario altogether.

Another thing which must be given importance is that 11600 was an important support and whenever markets break some important support and resistance , the move which comes is usually big. Take the example of 11K levels, earlier this year markets were repeatedly coming down from 11K levels and finally when this level was crossed in March, we saw a big rally which pushed Nifty all the way to 11800 levels. Now its been 5 days already since 11600 was broken and market is still sitting near 11600 levels (just below). If support is already taken out then why its not moving down in a big way? was it a false break? could be possible or probably markets just digesting the previous fall 11990-11460 (which was big too) and once this sideways movement or digestion is over, markets will open another leg down. Just a food for thought!

Happy Trading!!





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