Nifty Tomorrow: Prediction, outlook and Trend for 7th July 2021

 

Medium Term Trend: ☝ UP (Changes to down below 15400)

 Nifty @ 15820 - Facing stiff resistance at 15900

Now its been more than 20 trading sessions that Nifty has failed to close above 15900. Every time market touches 15900 we see some kind of sell-off which again take nifty down however nifty is not falling much either and its just stuck in a range of 15900-15600.

Now everyone knows that the obvious trade is to sell Nifty at 15900 and buy at 15600. The thing about obvious trade is that when everyone knows about them ( hence obvious) then they seldom works. Market cannot trade in such a narrow range for long and sooner or later it has to break it and as per our analysis the chances of market breaking on the upside is much much higher.  We have seen such scenario playing out multiple times in the past and whenever resistance is a fixed point ( like 15900 in this case) markets have broken above it. Its possible that we spend some more time in this range but eventually market is going to break it.

In such cases, many times, the breakout takes place with a gapup (or gapdown in case of breakdown) opening. Market wouldnt want traders to buy when it finally decides to make a move above 15900 levels so its a possibility that market opens above 15900 with a strong gapup some day. Fall from 15900 intraday today therefore is not a surprise and probably thats not how market is planning to take this level down.

On the downside we have seen 15600-650 is a strong support for now and below that 15450 levels. Its looking unlikely for now that market will break these levels in immediate future.

In Nutshell, trading in a range is possible for a few more days but eventually market is expected to break above 15900 and head higher. This level of 15900 is tested too many times and now has to break, we will be really surprised if markets make some kind of important top around this zone. If the breakout happens with  a gapup then it will indicate that markets are very strong. On the other hand if the breakout is slow and happens intraday then we need to be watchful for it could be a bull trap in the making.

Happy Trading!

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