Nifty Analysis, Outlook and Trend for 2nd Aug 2019

Medium Term Trend: ↓ Down (Changes to Up above 11500)

Weakness to the Core: Nifty Opened below 11100 and went on to break 11K and even 10900 intraday before a bout of short covering at lower levels pulled markets to 10985 levels. It closed down 140 points down to 10980 levels.

 

Nifty was down by around 240 points day at one stage however managed to recover 100 points in last 30 mins. We have been saying that as long as 11K is protected there is a chance of market bouncing back from these levels. We did see some intraday bounces ( like yesterday) but those were too shallow. We had also mentioned that close below 11040 or break below 10985 levels intraday will break the long term pattern. Todays closing is below 10985 levels and now the scenario has changed completely. There is a chance (a strong one) that even the long term pattern has changed now in favour of bear.

 

We were hopeful of Nifty sustaining 11K level, as it was something market had conquered after 3 months of sideways trading ( Feb-Apr). Now going back below the same level which took so much time to be crossed in the first place does not augur well for the near term.

 

The entire fall from 12103 was too slow which raised the doubt if the entire fall is just a corrective move, however as the time is passing by the speed of this fall is increasing which raises the question if the top was hit at 12K levels in July and not 12103 in may ( irregular top). Since markets hit 12K levels, the fall has been pretty sharp.

 

Now that we have had a close below 11040, it seems that  tables have turned and bullish possibilities have reduced to great extent. Since this  are was a critical support zone, we were optimistic and had been recommending long trades around 11150-11200 levels as there was a strong probability of market going towards 12K. It was a trade with good risk reward however it didn't materiliaze and we didn't see any sustainable major bounce. Having said this, now the flood gates have been opened and there is a strong possibility of nifty moving down from here. Of course the bounce of 100-200 points will keep coming in between but large trend should remain on the downside

The only way Nifty can Nifty open the bullish probability of 12K+ is by showing that todays breakdown was a false break. if its just a false break then markets should immediately move above 11200 levels. It should not hang around these levels for too long. Continuous trading below 11K-11150 zone could keep pushing Nifty down.

In Summary, the overall trend of markets have changed to down now and if weakness persists below 11K then Nifty  could head towards lower targets of 10500-10600 in near term.

Happy Trading!

 

 

 

Nifty Analysis, Outlook and Trend for 1st Aug 2019

Medium Term Trend: ↓ Down (Changes to Up above 11620)

Nifty Sees a Pullback: Nifty opened again in negative territory around 11050 and went on to touch 11K levels. However strong buying around 11K lifted the markets to 11140 levels and Nifty closed at 11120 levels. Up 35 points.

 

Yesterday market created a panic like situation where it fell almost 200 points from days high and the panic was further accentuated today with a drop of 80 odd points in the morning session. However we had clearly mentioned yesterday that inspite of such a big fall we continue to believe that long term trend remains up as long as 11K-11050 range holds. We had also mentioned that there is a likelihood that this fall has come just to create panic in the markets and to force weak hands out.

 

Today market touched exact low of 11K and moved up around 140 points and todays move justify our theory to some extent. However Nifty needs to exhibit a lot more strength  and follow up buying from here onwards to reenter bullish zone. We were bearish on Nifty as soon as 11750 broke & remained bearish till the zone of 11300-11250. We had been expecting Nifty to offer strong support in 11200-11250 zone with a final support at 11K-11050 level. Nifty might have slipped below 11200 zone but its still managing to hold on to its important supports and as a result the long term trend still remains up and like we mentioned yesterday as long as markets are not breaking long term trend and trading in the long term support zone, the only viable trend is on the long side. Now its entirely possible that in coming sessions the long term support is breached as well but usually whenever long support is broken , its broken in a vicious manner and not like this ( its been 40 days since market hit a high of 12103) the current fall is too slow.

 

In summary we continue to hold on to our view that a bullish move is possible from current levels and risky/smart traders should utilize each fall (as long 11K holds).to go long in small qty. There are many factors indicating that markets could form an all important low at current levels from a long term perspective and if certain things play out like we have been expecting then markets can give a sharp upmove.

 

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Happy Trading!

 

 

 

 

Nifty Analysis, Outlook and Trend for 31st Jul 2019

Medium Term Trend: ↓ Down (Changes to Up above 11620)

Carnage Continues: Nifty opened flat at 11200 and immediately touched a high of 11270 but familiar scrip played out once again and Bears dragged it almost 200 points from days high. It made a low of around 11070 and closed at 11085, down 100 points.

Nifty today broke below a crucial support of 11100 ( which was also the pre election low) We have been saying that as long as 11k-11100 level holds , the long term trend remains up and when the markets are so close near its long term support then only viable trade is on the long side.

 Markets are giving opportunities to exit long trades only intraday but its not sustaining. So even though 11100 was breached we still maintain out stand that a bullish move is possible from these levels. Last threshold or the final support lies in the range of 11K-11100 ( precise level is 11040). A close below 11040 and break of 10985 (even intraday) could prove to be a game changer. However as long as it holds possibility of Nifty giving a turnaround from these levels remains.

Today was the 9th consecutive day of this downmove, historically speaking max we see markets moving in one direction is ~10 days. Also Nifty might have broken below 11100 the equivalent level in Sensex is still not broken. Tomorrow could be a crucial day, we need to see if markets hits a new low but holds 11040 levels & after 10 day of sustained fall tries to recover and start some sort of a bullish move.

Another point to keep in mind is that this fall of last few days have brought down the medium term reversal level to around 11620 from 12100. If market holds the bottom around 11050 then a retest of 11600 is likely and crossing of 11600 will probably set the tone for 12K+ levels once again.

In Nutshell, its likely that the purpose of this fall is to just create panic and force out weak hands and if 11040 is sustained then markets start moving up again but in case 11040 is broken decisively then this view will not be valid & would change everything.

Happy Trading!

Nifty Analysis, Outlook and Trend for 30th Jul 2019

Medium Term Trend: ↓ Down (Changes to Up above 11720)

Testing crucial levels: Nifty opened flat but dropped to 11230 levels in the first hour of trading itself. 11220-230 failed to support markets this time & Nifty dropped to 11150 levels. It found some support there and closed at 11190 levels, down 95 points.

 

In last few posts we have been recommending buying in limited qty (for smart traders) with a SL of around 11220 and also mentioning that below 11220, the 11150 should again be used for initiating long positions. Nifty broke below 11220 and dropped to 11152 levels. For now, inspite of Nifty showing weakness daily we continue recommending buying on every dip ( as long as 11100-11150 level holds). This is a contrarian view we are taking while every analyst on TV and internet is recommending sell at every rise.

 

Reason we are still not bearish on Nifty is the fact that market is very close to critical levels which are important from long term perspective Nifty's near term/medium term may be down, the long term remains up & it makes sense to go long at these levels ( though it can be risky).  Nifty is trading below 200 DEMA which is a bearish sign also it has broken below its key trend lines but the fact is that it continues to trade above 200 SMA and some positive divergence is also being seen on short term charts.

 

Overall the chances are that the entire fall we are seeing from high of 12K levels remains a corrective move. Last month ( 20th June to be precise) we had posted a near term trend for market ( link given below) and had mentioned that markets are likely to start a  big move (on either side).

 

https://niftywaveindia.blogspot.com/2019/06/nifty-outlook-and-trend-for-coming.html

 

Now inspite of seeing a 500-600 fall from that level we are not convinced that markets have started a fresh bearish trend. The fall we are currently seeing is not carrying the characteristics we normally associate with a trending bearish move. Hence now the chances are increased that the markets may break on the upside.

 

In Nutshell, for now, inspite of markets being in a downmove, we continue to recommend buying on dips for risky and smart traders. Conservative traders can wait for markets to give a break out above 11400 levels on the other hand if 11050-11K levels break on the downside then whole perspective will change. A sharp upmove or a counter trend by bulls can not be ruled out from here.

 

Happy Trading!

 

 

Nifty Analysis, Outlook and Trend for 29th Jul 2019

Medium Term Trend: ↓ Down (Changes to Up above 11800)

11200 holds: Nifty opened flat and dropped to 11220 levels made after hovering around 11220 levels for some time it recovered and touched 11300 however failed to crossed it & closed at 11284 Up 30 points.

Nifty has been falling for last few days ( weeks actually) and even broken through some of the crucial resistance which was sitting at 11600 and then at 11300-325 however inspite of all this the long term trend still remains up & will remain up till the levels of 11100-11000 ( 10985 to be precise ) is not broken decisively. 11200 seems to be a good support for Nifty and while its holding there are chances that market can bounce up and try to test 11400-500 or higher levels. However if 11200 gets broken then the chances are  mkt will test  11K-11100 range.

For now inspite of the continuous fall we are witnessing, chances remains that market will make some sort of bottom around 11200 attempts to push higher hence we still recommend 'buy on dips' strategy for risky and smart traders as the charts continue to suggest that a pullback is round the corner.

Happy Trading

Nifty Analysis, Outlook and Trend for 26th Jul 2019

Medium Term Trend: ↓ Down (Changes to Up above 11800)

 

6th day & Counting : Nifty opened flat and made a quick dash towards 11360 levels but Bears once again pounced and pushed Nifty all the way down to 11240 levels. It finally closed @ 11250 down 20 points.

 

Yesterday we had mentioned even though 11300-325 is broken we need to see if Nifty sustains below 11300 and goes on to break 11230 levels. While Nifty did close below 11300 it managed to defend 11230 and on the intraday charts it even posted a higher high and higher low. So for immediate term 11230 - 11360 or 11200-11360 becomes a crucial range.

 

Market has been falling continuously and today was the 6th consecutive day, historically max we have seen markets moving in one direction 9-10 days so a bounce back is likely in next 2-3 days, now how far that bounce will last is a different question altogether.

 

For now though  markets have closed below 11300 but since we have a higher high & a higher low we need to see more weakness & a break below11230 to conclude further. If that happens then the chances are we heading down to 11125-11100 levels but we should be seeing some sort of bounce ( and not just intraday) soon. Now that bounce might come from current levels or slightly below hence long positions can still be carried ( if not exited already) with the same SL and if it triggers then wait for Nifty to fall around 11100 and initiate buy in small qty again at lower levels.

 

As far as Nifty OI is concerned markets continue to be pretty light and starting Aug series with just 1.7crore as OI. We have seen in past that whenever markets are light they fail to move down in a big way.

 

Happy Trading