Wednesday, August 19, 2020

Nifty Technical Analysis: Outlook and Trend for 20th Aug 2020

Medium Term Trend:  ↑UP (Changes to down below 10900)

11400 Conquered: Nifty opened above 11400 and closed and traded whole day above the critical resistance of 11385.

Levels of 11350-375 levels had been continuously posting stiff resistance for markets and last Fridays fall from 11300+ to lows of 11110 did indicate that probably the current upmove is done with and markets have gone again in correction mode (as mentioned in our previous post too). However it wasn't so and as soon as markets climbed back above 11300-330 levels yesterday it became evident that upmove is resumed again and markets are headed towards 11400 + levels now.

All the corrections we are seeing in markets have been pretty shallow and ranging from 2-5% price wise &  2-5 days timewise. This is the new trend in the markets and we have to respect that. So unless theres a clear signal of downmove one should refrain from short selling ( atleast this is what we have been doing recently). If in doubt book profits and sit out, no need to short this markets ( not yet).

Now that Nifty has crossed all important resistance of 11380 levels, the gates to much higher levels towards 11600-11800 have been opened. 11380 was a critical level (as explained in earlier posts) and markets moving above it can have significant impact from medium/long term perspective. Daily close is above 11380 and if Nifty can manage a weekly closing above 11400 (another couple of trading sessions to go) then it will be another sign of markets gaining strength.

In summary for now market remains strong and holding 11300 levels (and a weekly close above 11400) could push Nifty towards 11600-11800 levels. On the other hand if Nifty slips below 11270-300 levels then it could mean start of another (shallow?) correction.Long position can be held till this level holds and one should refrain from short selling in this market.

Happy Trading!

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