Nifty Analysis, Outlook and Trend for 23rd Jul 2019

Medium Term Trend: ↓ Down (Up above 11900)

Weakness Continues : Nifty opened weak around 11350 levels and dropped to 11300 before some support came and lifted markets to around 11360 levels. It closed at 11346 down 75 points.

 

Once Nifty broke below 11575-11525 levels,  the 11400-350 levels was very much on the cards. We had been mentioning in our previous posts that if 11525 is breached then that would push Nifty to 11460 and below that to 11350 levels. Today Nifty tested 11300 and closed around 11350 levels.

 

For medium term perspective even though Nifty seems pretty weak, the 11300-350 area is very good support zone now unless markets wants to start a major trend on the downside, we should see some bit of support coming in at these levels. Continuous free fall in the markets is not expected from these levels (unless the market is planning a long term change in trend). Risky and smart traders can initiate some bit of buying around 11300-325 levels with a SL of around 11250  while conservative and less risky traders must wait for markets to stabilize first. 

 

Nifty today opened with a gap down and the gap is visible both on daily as well as weekly chart now its highly unlikely that the gap will remain unfilled for rest of the week & Nifty should ( again its just a probability and not a confirmation) go on and atleast fill the gap ( that means 11400+).

 

Today Nifty might have touched 11300 but the good thing is that the day low was touched in the first 30 mins and after that markets spent entire day defending that low. Now it remains to be seen if markets can defend 11300 levels in next few trading sessions as well and go on to hit 11400+ ( and cover the gap it created today).

 

From extremely short term point of view, we went bearish as soon as 11575-525 was broken and now at 11300 we are neutral as markets are not likely to break 11250-11300 in a hurry ( again just a probability)

 

In nutshell, though overall trend remains weak, to create fresh short positions one should wait for a bounce back and on the contrary risky traders can initiate some light long positions around 11300-325 levels (with a tgt of 11400+ &  SL of 11250 levels). If markets continues to show weakness from here then this view will not be valid and will have to review and analyze again.

 

Happy Trading!!