Nifty Analysis, Outlook and Trend for 25th Jul 2019

Medium Term Trend: ↓ Down (Changes to Up above 11800)

 

Weakness Continues : Nifty opened positive around 11350 but soon bears pounced and pushed Nifty all the way down to 11230. It made some recovery towards the end and closed at 11270 ( down 60 points).

 

We had mentioned in the previous post that 11300-325 seems good support and its likely that market may try to hold around these levels and tries to push itself higher. We also suggested risky traders to buy ( small qty) around 11325 levels as we expected Nifty to touch 11400 ( and fill the gap). Nifty did bounce from 11320 to 11400 yesterday but today it broke 11300. So what to expect next?

 

Nifty may have broken below ( and even closed below) 11300 levels but 11300-350 is a crucial support so for a conclusive breakdown we need to see more weakness below 11300 levels and whether Nifty closes below 11300 again tomorrow. We had also mentioned 11250 to be the SL and though it was breached momentarily intraday, markets held on to it on closing basis. Now we need to see if Nifty tries to reclaim 11300 levels or goes on to make a new low.

 

Reason we are not sounding overly bearish inspite of a such a hectic fall in last 5-6 days is that even though the short term and medium term remains on the downside, the long term trend is still intact and Nifty is very close to crucial level for long term perspective. Unless 11100 is broken decisively ( pre election low) the long term stays intact and that's the reason we have been advocating buy ( for risky traders & in little qty only, conservative and less risky traders should stay out and wait for markets to reclaim 11525 levels before initiating long positions).

 

 Long positions entered around 11300-320 levels can still be held with a slightly revised SL of 11220 (below todays low) and if its breached then one should exit and tries to buy again around 11125-50 levels ( with a Sl of 11090). Now it may be possible that markets are changing long term trend and even 11100 will not be held but looking at charts right now, the chances of such a scenario playing out is looking a little less for now hence the risk reward ratio remains  favorable at these levels ( break of 11100 will change complete picture though). Having said this anything can happen in markets and its entirely possible that 11100 gets broken tomorrow itself.

 

In Nutshell, even though 11300 is broken today, we need to observe and see if the break is decisive and Nifty goes on to break todays low (11230) in which case we are probably heading to 11125-11150 levels which again is very imp level from long term perspective.

 

Happy Trading!!