Nifty Outlook and Trend for 30th Apr 2019

Medium Term Trend: ↑(UP)

 

Market update: After witnessing a sharp fall on expiry day, Nifty once again rallied 100+ points and closed above 11750 levels.

 

Nifty now has filled the 'down gap' it had created previously ( 11720-11750) thus it seems its ready to touch higher levels now. However it has very strong resistance at 11810 & 11850 levels hence these are the 2 critical levels to watch out for in coming days. Crossing these levels should pave the way for higher levels in Nifty.

 

One thing worth mentioning is that entire rise started from 10800 levels ( though the low point is 10600 the wave started from 10800). since 10800 we have seen 3 rallies ( 4th one is in progress now)

 

1st: 10800 to 11550  = 750 points

2nd:11310 to 11760 =  450 points

3rd:11550 to 11860 =  310 points

4th: 11560 to 11795 = 235 points (in progress and 11795 was hit on Thursday i.e, on expiry) 

 

Now if you look at it time wise, then 1st rally took 13/14 days, 2nd took 7 days,3rd took 4 days and the 4th (current one) has completed 3 days.

 

So it can be observed that magnitude of rallies is getting shorter and shorter both pricewise and timewise ( traders appear in hurry to book profits) at the same time the lower levels around 11550-11625 continue to see buying. Each subsequent rally is around 65-80% of previous rally. Such a scenario might be indicating that probably markets are losing strength slowly.

 Hence one should continue to be cautious and keep a close eye on 11800-1870 levels to see if the current rally remains shorter than previous one or become bigger and start a new trend. Move above 11870 ( which is also the previous high) will negate the current structure and will probably give a new thrust to the upmove we are witnessing currently. This is a short week ( just 3 days) so that's another reason to stay cautious.

 

Happy Trading!

 

 

 

.

 

 

 

 

 

Nifty Outlook and Trend for 26th Apr 2019

Medium Term Trend: ↑(UP)-

 

Market update: Nifty had a volatile day today , it opened flat went on to hit 11800 and then crashed to 11630 levels ( almost 170 points down from days high), It closed at 11641 down 80 points.

 

Yesterday we had mentioned that even though Nifty has closed above 11700-720 levels, the move has come only at the fag end of the session and the 'island reversal' area is also not filled so we need to see sustained trading above 11740-11750 levels to conclude if Nifty is ready for another move on the upside.

 

Though Nifty opened and traded strong initially it failed to sustain above 11750 and dropped back at 11720 levels and then in the last 30 mins it just let go. We needed a close above 11750 levels and now that we don't have it , theres a chance that entire pull back of yesterday was a mere pull back and Nifty probably will go down again.

 

If we see further weakness below 11620-610 levels tomorrow then Nifty is going to test 11550 levels once again and this time there is a very high probability that it will be broken but keep in mind the trend of market will remain up till the time 11450-470 level is not taken out so in a way the importance of 11550 is reduced now to some extent.

 

Last 3 days the call and pull writers have suffered a great deal. 9/10 times option writers have upper hand and they seldom lose because of time decay but this month was an exception & option writers were seen running for covers in all directions.

 

In nutshell, even tough market is trading in bullish zone , don't be tempted to buy yet. wait for market to give a clear signal and then only buy. Weakness below 11560 levels can take market down to 11450-75 levels and only when this level breaks can we expect more weakness to follow. VIX is sitting at 23+ levels and the choppy and volatile moves we are seeing since last few days can be expected in future as well.

 

Happy Trading!

 

 

 

 

Nifty Outlook and Trend for 25th Apr 2019

Medium Term Trend: ↑(UP)

Market update: Nifty had a cracker of a rally today. It opened slightly positive at 11615 levels and kept hovering around 11600 levels for most part of the day before shooting up to 11730 levels in last hour or so. It closed up 150 points at 11725 levels.

Day before yesterday Nifty 11700 CE strike price had seen an addition of around 30 lakh shares, today entire 30 lac+ got unwound. So this does make things pretty interesting, addition of  such a huge open interest and unwind of same within next 2 days is very very rare. Also we needed Nifty to break below 11550-520 levels by Thursday ( tomorrow) to signify the start of  trend reversal however Nifty took support at 11560 levels and once again bounced from there.

So after seeing todays rally its safe to assume that upside trend has resumed again? Well even though Nifty has closed above 11720 levels ( which we had mentioned as the key resistance level in previous post), the move has come only in the fag end of the session and is seem driven by short covering rather than actual buying hence need to see some more strength over todays high (11750 levels) to confirm the same. Had Nifty broken above 11700-720 in the morning session and then sustained above it for remainder of the day then probably we could have concluded that fear of correction is over but the manner in which 11720 is broken, we need to see some more strength or rather sustained trading above 11740-11750 levels.

On the other hand if Nifty again slips below 11700 and then below 11650 levels then probably this was just a false break. On Monday when Nifty had fallen 150 points ( 11750 to 11600), it had made a gap down opening and the gap stands at 11725-11750 levels. Today inspite of such a ferocious upmove, Nifty failed to close above the gapdown area. So its important that Nifty close the gap ( which is also the island reversal area), to negate the bearish implications of same. For now the gap still stands.

Also, looking at entire move from 10600 levels, You can make a strong trend line joining recent bottoms @ 10583 , 10730, 10850 & 11550 levels. This trend line was broken on Monday, now today even though Nifty bounced sharply it failed to close above the trendline. The upper level /resistance of this trend line comes to around 11740-750 levels ( exactly the high touched by Nifty today).

In Summary, even though Nifty has broken 11720 ( which shows Bulls are still in play and not in mood of giving up easily), we need to see sustained buying ( and not just a spike) above 11720-11750 levels now ( todays high) to conclude that fear of correction is probably over and Nifty is ready to move higher but if Nifty slips from these levels then probably the correction or sideways movement will resume.

Happy Trading!


 

Nifty Outlook and Trend for 24th Apr 2019

Medium Term Trend: ↑(UP)

Market update: Nifty Opened at 11600 levels and tried pushing its way up but met with a stiff resistance at 11650 levels. Once it became clear that markets are not able to push higher, Bears got active again and pushed nifty down below 11600 levels. It closed down at 11575 levels down 20 points.

 

Markets failed to cross 11650-11700 levels but 11540 levels was not broken either so for now there is still hope for bulls but that doesn't mean that one should go long here. Long positions should have been exited last week itself  (We already exited our longs around 11750/11800 levels last week itself). Now fresh longs are advised only above 11700-720 levels now.

 

Yesterday, Nifty had added around 29 lakh shares in 11700 Call (April), which has almost made it virtually impossible for Nifty to cross 11700 in this month ( atleast before expiry).

 

We had mentioned yesterday that Nifty must protect the lows of 11540 for next 3 trading sessions ( till expiry atleast). If this level is protected then there is still a probability of Nifty moving up further from here. One day is passed and Nifty somehow defended 11550 levels now remains to be seen if it can be defended tomorrow. weakness below 11540-520 levels will indicate that probably the near term top is done for now and the entire upmove which we saw recently ( 10600 to 11850) is ready to be corrected. Now to what extents it gets corrected will be something we need to analyse later only.

  

For now, same view as yesterday, keep an eye of 11540-520 levels & if it gets broken then more weakness is likely and on the other hand if it sustains and Nifty crosses 11700-11720 levels then we can hope to see another rally and higher levels in Nifty. Hence fresh long should be executed only above 11700-11720 levels. Medium term trend will change to down once 11500 level is breached. VIX is moving up daily and is sitting at 25 now, so if you decide to go long/short then keep in mind that markets can be choppy and intraday swings can be pretty huge so keep proper stoploss and then only trade.

 

To join us for daily/ real time whatsapp updates :- http://niftywaveindia.blogspot.com/2019/02/join-us-on-whatsapp-how-to-subscribe.html


Happy Trading!!

 

 

 

Nifty Outlook and Trend for 23rd Apr 2019

Medium Term Trend: ↑(Up)

Market update: Nifty had a pretty bad day today, it opened weak @ 11680 levels and kept trading weak through out the day and finally closed at 11595 levels down 150 points.

We had mentioned in previous post that Nifty had made a "bearish belt hold pattern" and it can have strong bearish implications going forward. Well we didn't have to wait for too long and the weakness surfaced next day (today) itself and caught most traders by surprise. We had also been mentioning that overall Nifty seems overstretched and it can reverse sharply anytime and without any warning.

Nifty has fallen around 250 points in 2 days (from high of 11850 levels) and the fall has been pretty sharp however there is still some hope for bulls if Nifty can sustain 11550 levels. It had taken Nifty 4 days to rise from 11540 to 11850 and in just one day it has retraced around 75% already. Now if Nifty can hold above 11550 for next 2-3 trading session then there is still hope for Nifty going above 11850 levels again, however if 11540 level is taken out by bears then there is a serious risk of this uptrend getting over (for now). Sustained trading below 11540 wont be good for market in medium/near term.

Entire move from 10600 to 11850 levels needs to be corrected by market and till now this correction is pending (even if the overall trend is bullish a correction should still come). If 11540 is broken then probably we can assume the correction has begun now. Markets short term trend had changed to 'down' on Thursday and all long positions should have been exited on Thursday itself however if someone is still holding longs then keep a tight stop loss of 11540. Fresh long should only be initiated above 11720-730 levels now. Don't be tempted to buy Nifty even if holds near 11550 level for some time ( it may be another bull trap).

In summary, there is a real possibility that near term top has been posted by Nifty at 11850 levels, confirmation will come once 11500-11540 levels is taken out in next 2-3 days. If this level sustains then there is still some hope for bulls and a chance of Nifty taking another shot at 11900 levels.

To join us for daily/ real time whatsapp updates :- http://niftywaveindia.blogspot.com/2019/02/join-us-on-whatsapp-how-to-subscribe.html


Happy Trading!!