Nifty Analysis: Outlook and Trend for 2nd Apr 2020

Medium Term Trend: ↓Down (Changes to up above 9900)

Below 8300: Nifty opened weak and kept drifting lower. It kept moving on moving south in a steady move and touched 8200 levels intraday & closed at 8250, down 350 odd points.

In last post we had mentioned that Nifty can drop to 8150-8200 levels ( which is the breakout area of falling wedge) and below which it can further fall to 7800 levels but going below 7800 could mean Nifty is preparing itself for an extended stay at lower levels.

Broadly speaking, 8500 is the level, where nifty has completed a major correction (which is in line with all major corrections seen in Indian markets). whenever Nifty has fallen below 8500 levels, it has managed to bounced back. Last 2 weekly close have been above 8500 and even the monthly close yesterday came above it. Vix is falling daily but still above 60 which is very high for normalcy to return to markets, it should fall below 25-30 levels, till then market is likely to continue moving sharply in either direction.

Last post we had also mentioned about the possibility of a bullish extracting triangle, that option is still on and will be negated once E leg becomes larger than  C leg ( i.e, below 7750-7800 levels.).

Hence we should continue to observe markets and if Nifty takes support in 7800-8200 range ( big range) and move back sharply  above 8500 levels then there is a possibility of markets starting a new trend on the upside. If we continue to witness weakness below 8200 and 7800 levels then the pattern will be negated and will be strong sign then markes are preparing itself for an extended correction and likely to be range bound/weak for quite some time ( 10-12 months from here).

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Nifty Analysis: Outlook and Trend for 31st Mar 2020

Medium Term Trend: ↓Down (Changes to up above 9900)
Weakness resumes: Nifty opened weak around 8400 and held on to its opening lows but gave up in the end. It closed below 8300 with a substantial loss of 380 points.

There is still a lot of scepticism and nervousness which is visible at high levels ( which is understandable). In last post we had mentioned that short term trend has changed to +ve and we need to see if it has powers to change the medium term or reverses back to -ve zone. Today, once 8300 was broken, chances of short term again going back to -ve zone has increased.

There are couple of interesting observations I would like to highlight in todays post so would request everyone to read carefully (and atleast couple of times).

Regular readers of the blog would be aware that Nifty had posted an 'extracting triangle' (in late Feb) which we had mentioned in our 24th Feb post (same can be read here : Nifty update for 25th Feb). below is the chart which we had put.

Nifty daily ( Feb 2020)

This was a bearish 'extracting triangle' (more about such formations can be read here: Extracting Triangles) which got completed around 12100-12200 and after its completion Nifty corrected almost 5000 points in 4-5 weeks. Now everyone can see the power of extracting triangle and how it formed during this market top.

Now look at Nifty chart for last few days, there is a possibility that a similar extracting triangle ( bullish this time) is getting formed at lower levels. This has been in formation since Nifty hit a high of 10200 level (on the first freeze day). Here A>C and D>B. So far E is smaller than C ( rallies are getting bigger and falls are getting smaller)

Nifty Daily

As long as E remain smaller than C, meaning Nifty doesn't fall below ~7700 levels and then mkt goes on to recover and make a new high above 9100 levels will confirm completion of a bullish extracting triangle. Last extracting triangle created a top can a new one create a bottom? Yes it can provided it indeed turns out to be an extracting triangle ( i.e, E remains smaller C followed up by a faster retracement above 9100 levels)

Now lets see another chart. We had also mentioned a possibility of markets completing a contracting wedge recently.

Nifty Hourly

Breakout point for this contraction/wedge is around 8150-8200 levels so that should act as an support in near term however if it goes down then the next support will be around 7750-7800 levels which is also the starting point of 'B' leg of extracting triangle (or D leg of contracting wedge). Weakness below 8150 and then 7750 will negate the formation of extracting triangle and wedge (both) but as long as these level stands there is always a chance of market staging a comeback.

In Summary if 8150 or 7750 holds and we see a sharp recovery back above 9100 levels then there is a strong (infact very strong) possibility that bottoming out process is over and done and market is ready to scale new heights. However consistent weakness below 7750 levels will push markets again in deep correction mode time wise ( like we have been mentioning in prior posts). Hence one need to be careful and accordingly trade.

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Nifty Analysis: Outlook and Trend for 30th Mar 2020

Medium Term Trend: ↓Down (Changes to up above 9900)

Volatility Continues: Nifty opened strong and even touched 9K+ levels, but gave up all the gains to close flat at 8660 levels.

Nifty might have given up 400-500 point from days high but important thing is that markets have managed to close above 8500 levels. Second successive weekly close has come above 8500 levels which is a positive sign. Though we would have liked to see a weekly close above 8800 levels, nifty did hit that level intraday but couldnt manage to hold on to it. profit booking by traders once the rate cut news was out kept the selling pressure up. Rate cut news was more or less factored in prices already hence markets ignored it today.

Going forward , we need to see if markets is managing to hold on to 8000-8500 levels in coming days. if it does then chances of markets making another move towards 10K is there but if weakness resumes below 8500 and then below 8k levels then probably we are heading towards deeper correction which is likely to stay for some time to come. For now, chances of first scenario playing out is higher than the second but anything is possible in markets so lets see.

Nutshell, short term trend has changed to UP and a move 9900 will change the medium term to UP as well, so we need to see if short term trend has the power and momentum to change the  medium term too. Trading wise will still recommend avoiding short ( as long as 8K level holds).

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Nifty Analysis: Outlook and Trend for 27th Mar 2020

Medium Term Trend: ↓Down (Changes to up above 9900)

Nifty Exhibiting Strength: Nifty opened around 8500 and went on to cross 8700. There was some usual volatility and Nifty threatened to gave up all its gain but fnally managed to close above 8600 and added 300+ points in the process.

Yesterday we had mentioned that Nifty seems to have broken a falling wedge (which is a bullish pattern) hence the chances are that we see some sharp movement from here. We had also advised against going short in this markets and instead advocated going long on dips. Nifty did touch almost 8800 levels today itself.

Also we have been mentioning that correction seems to be done around 8500 levels (Mondays fall had raised a doubt but nifty has managed to climb backup again so it can be ignored). Last weekly close was above 8500 and if Nifty can close again above 8500 ( 8800 preferably) then we will have positive weekly close in many weeks. Then a monthly close above these levels will be a strong indication that perhaps bottom is done already.

So will keep it short today, overall view remains same, the current thrust from the ralling wedge has the capacity to push markets above 9k levels so avoild initiating shorts (as long as 8100-8200 holds). If Nifty manages to hold/move back above 8500-9000 range then the chances of it starting a fresh trend on the upside will increase. Volatility is still pretty high (VIX is 70+ which is insane). Some stability can be expected once VIX start trading below 40 ( which is still very far away). Remember markets will find its bottom and start a trend on the upside much before this Corona issue start to dissipate. Markets always prempts and acts in advance ( thats what make them intresting isnt it?).

From trading perspective we did enter long around 8K levels yesterday,To join our free algorithm based buy/sell whatsapp service during market hours, pls click below link or whatsapp @ 9319321906 

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Nifty Analysis: Outlook and Trend for 26th Mar 2020

Medium Term Trend: ↓Down (Changes to up above 9900)

Back above 8000: Nifty opened flat and quickly turned negative. However buying around 7800 levels helped push Nifty back above 8k levels. It made a high of 8375 and closed at 8320 levels, up by 520 points.

Monday's mega fall ( from 8700 to 7600 levels) had raised doubt if markets were preparing themselves for a long-haul in Bear territory. Market had already finished most of the correction (price wise and on many others parameters which we have already shared in previous posts) around 8400 levels last week and another 10%+ fall on Monday did raise serious question marks. However since we are analysing monthly charts we need to see how and where Nifty finishes the current month. Todays sharp recoery is a positive news for the bulls.

If in next few sessions markets can move above and 8500-9000 levels then probably we can say that correction is over and markets are ready to move up but in case markets gets dragged down to 7500 levels once again and we start spending more time there then it could mean a lot more of pain is still pending.

Price wise correction is mostly done by markets and now the only question is when do we start recovering. Answer is if we see a fast recovering from here quickly then we can see a new trend starting on the upside very soon but if we fail to move above 8500-9000 levels and markets keep dropping below 8k levels then the chances are that we spend atleast 8-10 months in a tight range ( time wise correction). In time wise correction we may not see much fall in prices but it will be test of patience of investors and traders both.

From trading perspective. Nifty seems to have broken a falling wedge/contracting triangle (once it moved above 8100 levels) which is a strong bullish sign and could push Nifty back above 9000-9500 levels in a sharp move. More about triangle pattern can be read at:

http://niftywaveindia.blogspot.com/2018/12/technical-learning-contracting-and.html

Nifty Hourly chart

In a nutshell, move back above 8300 levels is a welcome and positive sign and if Nifty is able to recover and move above 8500-8800-9000 levels in next couple of trading sessions then probably we can expect start of fresh leg on the upside pretty soon. However a drop below 8K levels back to 7500 will tilt the favour of markets going deep in correction mode (time wise). From trading perspective, it seems that markets have broken out of a falling contracting triangle so sharp movement on the upside can be expected in coming sessions. Try to avoid going short and buy on dips. Buying around 8100-8200 levels (if it goes there) with a Sl of around 7900 could be a sound strategy.

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