Nifty Tomorrow: Prediction, outlook and Nifty Trend for 09th March 2022

  Medium Term Trend:👇(Down) - Reversal level @ 16700

Nifty @ 15985 up 160 points- pull back witnessed from lows

In our last post we had mentioned "inspite of so much weakness and skepticism, holding 16400-500 levels could push Nifty towards 17K-17100 levels. On the other hand continuous weakness below 16400 could drag nifty towards 16K and lower levels"

Last week holding 16500, Nifty had raised a possibility that a move towards 17K was possible however once nifty broke down below 16400-450 levels the chances of such a reversal became thin and Nifty went below 16k  (it even broke 15700 marginally) but then a sharp pull back at the end of day pulled markets back above 16K levels and from 150 points down at one stage became 150 points up.

Markets have been oversold recently hence its difficult to say if its actually just a technical bounce or some sort of serious pullback. VIX remains high (around 30s) and till the time it starts cooling off market will remain highly volatile. However point to be noted is the weekly RSI had touched 36 this morning and usually when RSI does that its close to making some sort of bottom. lets have a look at the chart below.

Nifty Weekly 2011-2022

Here one can see that in last 10 years or so whenever Nifty weekly RSI has touched mid 30s levels, markets have made some sort of bottom ( with an exception of Jan-2020 which was a covid thing). We had mentioned in one of our previous post that technical level of H&S pattern breakout (neckline at 16900) comes to 15100-15500 & at those level Nifty's weekly RSI will come to around 34-35 levels. 

So most probably areas around 15500 ( give or take 200-300 points here or there) could be the zone where market attempts to make some sort of bottom. Now please note that is not always easy to identify the bottom area in advance. Its only in the future when markets moves up from there that we are able to say that it was indeed a bottom area. Its also possible that bottom was already hit today itself, but till the time we see actuals evidence of markets bottoming out we are going to keep the mid term signal as down only (Earlier view that this could be a range bound market between 16500-18500 is not valid now).

In summary, ongoing weakness in markets could drag Nifty further towards 15400 levels and unless its start of a major bear cycle ( till now there is no evidence that it is one) markets should not fall much below these levels. On the upside holding above todays close and then moving above 16150-200 could be positive for Nifty. Major resistance is sitting at 16650 levels and till the time its not crossed, there is always a fear of markets turning down again.

Happy Trading!