Nifty Analysis: Outlook and Trend for 17th Jul 2020

Medium Term Trend: ↑UP (Changes to down below 10350)

Seeking Direction: Nifty opened flattish and after spending some time around 11600-650 zone Nifty shot up and closed above 10700 levels with a gain of 120 points.

Since last few ways Nifty is running like a headless chicken and is not able to establish a clear direction. One day its bulls and next day its bears. as a result nifty is stuck between 10550 -10850 levels and just swinging wildly in this range.

However thing to note is that Nifty is indicating that it has probably already established some sort of top around 10900 zone. Yesterday there was an attempt and chance to reclaim new highs but it didn't materialise , was short lived and Nifty saw a very sharp fall from 10800 levels back to 10600 levels.

In last couple of days Nifty has indicated a strong support zone in 10570-10600 area. Nifty has taken support 3 times in last 3 days at this level. Now while the support is fixed at same level, the resistance level are falling down first it was 10895-Monday, then 10825-yesterday and 10755 today. In case market fails to break and sustain above todays high and once again drop around 10600 levels, then the chances are this support area wont hold. It is tested enough times already (with each test the support gets weaker and weaker) hence if the markets are strong this level should not be tested again break of this zone could likely push Nifty towards 10400 levels.

On the upside, Markets are finding resistance at every rise and until it takes out 10850 zone, the chances of markets falling again towards 10600 or lower will always be there. Markets are being treacherous and wild moves in either direction is just triggering SL on both sides. Generally such wild moves are seen when markets are preparing itself for some big trending move ( we saw such moves when Nifty was at 9300 levels In May, but till that move actually start, it could be tough and painful for positional traders.

Happy Trading!

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