Nifty Analysis: Outlook and Trend for 23rd Mar 2020

Medium Term Trend: ↓Down (Changes to up above 10100)

Smart Comeback: Nifty opened flattish but kept on moving upwards and went on to cross 8800 intraday. it closed at 8750 levels with strong gains.

We have continuously been mentioning that at 8500-9000 levels market has achieved correction which in magnitude is already measuring upto 2008 correction ( and that was the biggest correction we have seen in our markets). since volatility is high, a sharp movement can take place from any level, but logically we shouldnot trade consistently below 8500 levels for long. Yesterday markets broke it and close below it marginally but today it has again bounced back. So even if Nifty breaks below it , its likely to be temporary.

We had also mentioned how the long term RSI is already at a level which is only seen during major bottom areas. Now lets just have a look at another data point. This is monthly chart of sensex with 100DSMA.

Sensex Monthly

The last time this moving average was touched was way back in 2008 and 12 years later now in 2020. Which again proves that we are at a vey critical and important juncture from 'All Time Trend'  perspective.

So will keep in short, overall view remains same . We are nearing an important area which could form a bottom for next 10 years perspective hence its prudent to invest in good quality stock at these levels. Those who are predictiong doomdsday kind of scenario and predicting the end of the world are getting ahead of themselves. From trading perspective yesterday and today Nifty offered good levels to initiate buys & we did buy @ 7950 levels yesterday & 8240 levels today again.

We dont recommend holding shorts as long as Nifty is trading above 8300 levels and a cross above 8900-9k levels can push Nifty back above 9500-9700 levels. Final hurdle placed at 10100 above which the medium term trend will change to up.

One more thing, markets will find its bottom a lot before this Covid-19 things begins to dissipate. Market always act in advance hence if  you are thinking that markets will make the bottom on the day a proper solution is found then you are totally wrong. Always rememeber- bullish trend emerges when the story & situation on the ground is still pretty bad.

Happy Trading!

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