Nifty Analysis, Outlook and Trend for 8th Jul 2019

Medium Term Trend:  ↑UP (down below 11650)

Sharp Sell Off: Nifty opened in +ve territory today however failed to sustain above 11975 levels and dropped below 11900 levels, it tried to sustain around 11850-75 levels but the late bout of selling pushed it further down to 11800. It closed with a big loss of 135 points.

Today was the budget day so volatility was expected, however the intensity and range of the fall is surprising. We were expecting some resistance in 11940-975 zone but were also expecting markets to breach it but clearly markets were not ready (yet). There was nothing in the budget which could have spooked the market but it seems it was due to unwinding of  speculative positions which were made ahead of the budget (expecting some positive surprise). anyways markets go where they want to go irrespective of budgets and events.

Nifty Daily Chart

After seeing such a big sell off knives are already out and many analysts on TV and websites have started terming this as a start of new downtrend. This could be true however judging markets on the basis of just one day fall would be premature as per our thinking, Even though Nifty fell with a bang there were few +ve things. Firstly there was a big divergence between Nifty and Bank Nifty. While Nifty fell 130 points, Bank Nifty closed flat, secondly some +ve divergence was witnessed on the hourly charts and even though Nifty has fallen sharply, the weekly close is still in positive and Nifty has protected the low of previous low. And lastly though most momentum indicators have turned negative on hourly charts, they continue to be +ve on daily charts. In the chart above it can be seen that Nifty has closed at a very crucial support zone. If one joins the recent lows of 11100 and 11650 then support line is pointing to 11800 ( which for now is not broken).

Also, if one look at the daily charts, this rally started from 11650 levels and took 12 trading sessions to reach 11983. Now in last 12 days there were 9 days where markets posted a new high above previous day high & just 5 days where the low of previous day was breached. Now of course if markets are going to down, then this doesn't matter but the last 8-10 days were more in favour of bulls than bears.

Now to talk about negatives, firstly the biggest negative is that Markets have failed to take out 12K levels yet again & secondly markets have posted a shooting star on weekly charts and lastly even though markets have protected the lows of 11600, the follow up buying seems to have lacked momentum till now. 

All in all markets continue to remain choppy (todays choppiness was probably due to the big event) and even though they have taken a big hit today, further weakness is likely only when Nifty start trading below 11800 and goes on to break 11760. If 11760-750 fails to hold then markets can quickly drop to 11650 levels. Market support zone now stand at 11650 ( from previous level of 11550)  and break of 11650 could put markets in a free fall. If markets start trading below 11750 then the likelihood of markets breaking below 11650 is pretty high however if 11800 sustains and Nifty once again starts showing some strength above 11850 levels then we can see 11975 levels being tested once again.

Happy Trading!!

                                 

 

Nifty Analysis, Outlook and Trend for 5th Jul 2019

Medium Term Trend: ↑UP (down below 11550)

Slow and Steady: Nifty opened slightly in positive territory and consolidated entire day in the range of 11940 and 11970. It finally closed at 11945 levels up 30 points.

Like we mentioned in our previous posts that nifty has a good resistance in 11940 975 zone and the way Nifty is trading it seems this resistance will be taken out. Yesterday markets tested 11940 but couldn't cross it, today it tested the upper range 11970 and closed above 11940 levels. Tomorrow is an important day (budget) and it will be interesting to see if nifty is able to cross these levels. Once crossed, the next logical target for market will be 12050-75 zone and if that is surpassed then there its highly likely that mkts are starting or have already started a strong trend on the upside.

One caution though is that Niftys movement from lows of 11600 is looking like a rising wedge (which is a bearish pattern ) however once 12075 level is taken out then rising wedge pattern will be negated.

12050 12075 assumes a lot of significance as it was the high touched during elections result day and till day mkt has not been able to cross it. Markets have a habit of posting tops on euphoric days and election result day was one such euphoric day. However another important characteristics of the market is that it doesn't hang around for too long near top area. Now Nifty has spent almost a month near this zone hence the chances of Nifty taking out this zone has increased. So for now its time to be cautiously optimistic.

Happy trading!!

Nifty Analysis, Outlook and Trend for 4th Jul 2019

Medium Term Trend:  ↑UP (down below 11550)

Cautiously Positive: Nifty opened flat and traded around 11900-920 for most part of the day. It made a high of around 11940 but failed to sustain and closed at 11915 levels up 6 points.
 We have been mentioning that 11940-11975 is a resistance level for Nifty (and 12050-75 after that) Today Nifty tested 11940 but didn't cross it and pulled back a little. We had also mentioned Nifty has done a good amount of consolidation at 11800 levels therefore the chances are that this resistance will be taken out. Though markets failed to take it out today, it remains to be seen if this level can hold Nifty in coming session(s).

One thing to notice is that this entire rise from 11600 level is looking like an 'ending diagonal' or 'rising wedge' which can have some bearish implications if 11820-810 is taken out hence 11800 should be the deal top losses for all long positions for now. Another thing worth noticing is that US markets have surpassed their previous 52 weeks high and trading ~1% above their previous highs.

Overall we continue to believe that there is a probability of markets starting a trending move from these levels however for that to happen Nifty needs to take out 12050-75 levels (for bullish options) and 11550 levels (for bearish trend). Nifty is just 100-150 points away from a very importance zone.

For immediate terms 11800-810 level ( yesterdays low) and 11975 becomes important and break of these levels will push Nifty to test its major support (11550) or resistance (12075) area.

Happy Trading!

 

Nifty Analysis, Outlook and Trend for 3rd Jul 2019

Medium Term Trend:  ↑UP (down below 11550)

Bounce Back Continues: Nifty opened flat but after trading flat for some time it dropped to 11820 levels. It traded around 11820-11840 in the first half and moved to 11900 levels in second half. it closed at 11910 up 45 points.

After opening around 11880 levels, nifty once again started showing weakness and started drifting around 11800 levels however support came at 11820 levels and lifted the markets up. In the process today Nifty hit a high of 11917 which was higher than its previous swing high of 11911 ( posted on expiry day). Yesterday we had mentioned that if the current rally is only due to US-China trade easing up then it wont sustain for long and should reverse immediately else markets could add even more points. Though markets started a mini sell-off in the morning the fall got arrested soon and markets started a march towards 11900 levels once again.

Going forward, Nifty will see some resistance in 11940-975 range & it will be interesting to see how Nifty tackles this range. Nifty seems to have done good amount of consolidation around 11800 levels so the chances of Nifty surpassing this resistance have increased now. A more important resistance now sits at 12050-75 levels, which is also the high markets hit on election day & is been more than a month and Nifty has still not been able to take it out. So for any bullish scenario to play out, Nifty should take out this resistance very soon.

As we have been saying that though markets are stuck in a range for last 3 months, its now probably ready to break this tight range and initiate a strong trending move. Nifty showing strength from here and surpassing 12050-75 could push Nifty towards much higher levels and on the downside if 11815-800 breaks then Nifty could drop to 11750-25 levels and below that 11650-625 will continue to provide support.

Happy Trading


 

Nifty Analysis, Outlook and Trend for 2nd Jul 2019

Medium Term Trend:  ↑UP (down below 11550)

Bounce Back: Nifty opened strong around 11850 on the back of strong global cues and traded whole day between 11840-11880 levels. It closed at 11865 levels and added 75 points.

After giving a weak closing on Friday nifty bounced back smartly and reversed all its Friday losses and once again reached within the striking distance of 11900 levels. Though Nifty didn't add substantial gains to its opening price, it held on to its opening gain ( which is a positive sign). A game of cat and mouse is in play since last 3 months ( since Apr) where market is moving aimlessly and ended up not going anywhere. Historically speaking July is a month which usually sees big movement/swing trades hence the fact that we have already consumed 3 months at almost same level and a new month has begun today (which generally sees big swings), we can now hope to see a big trending move anytime now.

Todays upmove was basically in line with global markets which went up due to trade tensions between US & China subsiding.If that is the only factor behind todays rally then ideally it should not sustain and market should reverse these gains completely very shortly. However if the rally is part of the ongoing trend and merely helped by this positive news then gains should stay and should add more points going forward.

As far as Nifty is concerned, 11950-11975 still remains a resistance and above that 12070-12080 will pose a big challenge. If  Nifty can clear these hurdle then probably it will be setting up the stage for one strong push on the upside. On the downside, 11800-11760 will continue to provide support and below that 11650-11600 ( evergreen support) will come into play.

Happy Trading!