Monday, July 8, 2019

Nifty Analysis, Outlook and Trend for 9th Jul 2019


Medium Term Trend:   Down (Up above 12103)

Black Monday: Nifty opened with a huge gap down at 11720 levels and didn't lookup after that. It crashed to a low of 11523 and closed at 11564 levels, a whopping 250 points down.
Market showed weakness all around and there was no place to hide for anystock or sector. In previous posts we had mentioned that there is a possibility of upmove sustaining if 11760-11800 is sustained but if 11750 is taken out then we are heading straight to 11650 and below that 11500 levels ( as 11650 was our medium term support level). Nifty broke down all levels in one day and in one go.
When Nifty gave a gap down opening below 11750 levels it was a clear sign that it wants to go below 11600 levels in hurry. We had also mentioned few positive factors which suggested a possible support at 11800 levels however everything was negated at 9.16am when Nifty opened below 11750.
Such a big swinging move was expected on both sides since last few days and now that it has come on the downside chances are that gateway to much lower levels have been opened. Nifty had a huge gapup in the range of 11400-11600 levels and today it has dropped below 11600 and now trading in the gap zone which it was protecting till now. Incidentally, market has now broken the election day low ( 11614) as well ( election day high still sustains and market has failed to trade above it for more than a session). This is indeed a  big bearish sign.

Now going forward, 11500-525 assumes a lot of significance as sustained trading below this would push Nifty back to 11400 (lowest end of this gap) and once 11400 is taken out then another wave of down move can be expected. For now, due to the huge fall we have witnessed today, the market has become oversold so some bit of consolidation and pullback can not be ruled out. To resume uptrend Nifty needs to reclaim 11825 levels. Only once we start trading above 11825 can we hope for a fresh up move now.Nifty has a big resistance in 11625-11675 zone now. This area was continuously providing support to Nifty since last few weeks but has been taken out in one swift action.

To summarise, as soon as Nifty opened below 11750 today, it moved in bear zone. Now unless 11690 and 11825 is taken out there is every possibility of Nifty falling even more from here. From positive perspective, 11523 level ( which is the 38.2% retracement level of entire rise from 10583 to 12103) should offer some support and if Nifty manages to protect this level ( todays low) then there is some chance of Markets clawing its way back again.

Happy Trading!

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