Nifty Analysis: Outlook and Trend for 16th Apr 2020

Medium Term Trend: ↓Down (Changes to up above 9800)

Surrendered all Gains: Nifty opened with a gap-up and went on to touch 9250 levels, however it couldnt sustain there and in the second half of trading session slipped again below 9000 levels to close at 8935 levels.

In the first half Nifty was up 250 points and then in the second half it was trading 100 down. The way Nifty fell from 9200 levels and below 8900 levels ( which was the low of previous session) does raise some question marks on this rally/upmove which started from 8k levels. Ideally we would have liked Nifty to protect previous session low (especially after a solid gapup opening).

In our previous posts we had been mentioning about the possibility of Nifty moving above 9k levels towards 9500 and then towards 9800. Though Nifty touched 9250, todays fall does seems to have put a small brake on this overall upmove. Now its possible that entire fall is retraced immediately in next 1-2 trading sessions and Nifty once again moves back above 9100-9200 levels. If that happens then our old view will continue to hold, however if we see followup weakness below 8850 tomorrow ( below todays low) then its likely that Nifty remains weak for some more time and may not move towards 9500 in a hurry. If that happens then we will have to reassess the short term scenario.

9k levels has now seen too much congestion, and usually whenever congestion are formed they are taken out. Now unless we start seeing sharp falls and Nifty once again drops towards 8k levels ( chances are pretty slim) there is a possibility that market will eventually break above 9100 levels and move towards 9500 levels.

So in summary, todays move was indeed disappointing and Nifty failure to move and close above 9100-9150 levels has put a small brake or question mark on this ongoing rally, however if we see a move again above 9100 levels in next 1-2 trading sessions then probably todays fall was just an oneoff thing which can be ignored and we can once again expect markets to make a move towards 9500 levels. On the other hand more weakness below 8850 levels could delay things and push nifty back towards 8500-600 levels. In either situation stay away from indulging on the short side and if Nifty start trading above 9100 levels then look to enter long positions.

Happy Trading.

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