Nifty Analysis Tomorrow: Prediction, outlook and Nifty Trend for 27th Dec 2021

 

Medium Term Trend:👇 (Downswing maturing)

Nifty @ 17003 - Nifty Finishing 10 day Downcycle and Managing close above 17000

In the last update, I had mentioned that "it remains to be seen if Nifty manages to move back above 16800-17K levels. Chances are that price wise correction seems to have completed and what we are seeing is just an exaggerated move on the downside which could reverse in a similar fashion in coming trading sessions (when I say reverse I mean move back above 17K levels and not necessarily above 18500 levels).

So after 3 consecutive close just below 17000 levels, Nifty has managed to make a move above 17K levels again and more importantly the weekly close has also come above it which is positive indeed. Another important thing to note is that the lows of Monday were protected and not tested again which suggests that fall witnessed on Monday was just an exaggerated fall or an excess move or a false break on the downside (now that market has moved back above 17K levels).

16900-17K levels was a good support and if the market was actually planning an extended bearish move then ideally it should not have been tested again (let alone mkts trading above it).

We had also highlighted how market is following a 9-10 day cycle of up-moves and down-moves since last 2 months & looking at the charts it seems either the last down-move finished in just 6 days (Monday) or in a irregular move in 10 days (today). In both scenario it seems either markets have already opened a new leg on the upside or it will open the same on Monday.

Overall market still seems to be in Bear trajectory but its hanging just by a thread and can breakout any time. Time is running out for Bears and if they fail to act in next 1-2 trading sessions then its likely that Bulls can once again start controlling the markets.

We may or may not see a runaway rally (as I had pointed out in the last update as well) but even if its a sideway move from here, it will be a sideway move with a positive bias ( where markets slowly but surely be moving up).

Happy Trading!

Nifty Analysis Tomorrow: Prediction, outlook and Nifty Trend for 21st Dec 2021

 

Medium Term Trend:👇 Down

Nifty @ 16614 - Blood Bath after Black Friday

In the last update, when Nifty was around 18K levels I had mentioned that.." fall towards 17500/600 (or even a bit lower towards 17K) is very much possible in the current wave".   Nifty tested 17K levels in Nov end and attempted a recovery and moved towards 17500 levels but could not sustain above it and in a matter of 4-5 days has fallen >1000 points towards 16500 levels.

I had also mentioned that I am not expecting any major sustainable fall below 17K levels (based on time cycle study) however today market has convincingly broken below 17K levels which might change things a little bit going forward. Having said this its just one day and it remains to be seen if Nifty manages to move back above 16800-17K levels. Chances are that price wise correction seems to have completed and what we are seeing is just an exaggerated move on the downside which could reverse in a similar fashion in coming trading sessions but one must not try to do bottom fishing and and from trading perspective it make sense to not indulge in long trades for time being ( when I say reverse I mean move back above 17K levels and not necessarily above 18500 levels)

Nifty Daily

In the daily chart above it can be seen that Nifty is following a 9-10 days cycle for each up and down leg. Entire downmove from 18500 level can be read as 5 legged ABCDE and we seem to be in E leg which is in 6th day of fall. Going by the current cycle its likely to continue for another 3-4 trading sessions and after that we might see some sort of recovery. 

Important thing is that since the fall has taken 5 legs , markets may not move back above 18K levels in a hurry and can instead go in for another sideways/corrective mode (preferably between 17K and 18K levels) which might last for another 8-10 weeks. If the fall was a 3 legged fall and markets had made the bottom in Nov end towards 16900 levels then we could have expected a new high soon but now things might get delayed. Overall view remains bullish but it remains to be seen if we see a lot more sideways trading between 17-18K levels for next couple of months.

Similar situations had played out in 2019 too ( see below chart) after a severe fall markets went into a long sideways consolidation. It remains to be seen if same scenario is repeated in 2021-22 as well. 

Nifty Daily (Sep19-Mar20)

There is a strong probability of one thing though, after next 3-4 trading sessions we may not see such exaggerated moves on the downside anymore and that could be the end of this downcycle. It may or may not move towards new highs but its not likely to break down further from current lows.

Happy Trading!!