Nifty Analysis: Outlook and Trend for 20th Apr 2020

Medium Term Trend: ↓Down (Changes to up above 9800)

Nifty Flies: Nifty opened with a bang around 9300 levels and then slowly drifted towards 9100 levels (disappointed by no cut in repo rates by RBI) but buying emerged at 9100 levels and pushed Nifty back towards 9300 levels.

Nifty needed to move back above 9100-9150 levels to signal resumption of short-term uptrend and Nifty did that in style. Though there were some intraday scares, Nifty finally managed to close near the high point of the day.

On Weekly charts this is the second consecutive higher close (first time it happened in last 6 months) and could indicate that undertone is slowly improving. For this week, Nifty has posted a hanging man/shooting star like pattern which could have some bearish implications if the highs of this week are not convincingly crossed. So in coming week we need Nifty to trade above 9325 levels if that happens then we are heading towards 9500-9700 levels. On the downside 9100 has emerged as a strong support now.

In summary, holding 9200 and moving above 9325 levels could push Nifty towards 9500-9700 levels and on the downside, if 9100 breaks, then it could drop towards 8900 levels once again. Below 8900 we can test 8500-8300 (chances are this scenario playing out are slim though).

From trading perspective we have been recommending against going short in this market ( and now you know why). One should look to trade only on the long side and if Nifty manages to crossing over 9325 levels convincingly on Monday then that would strengthen our stand further.


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Nifty Analysis: Outlook and Trend for 17th Apr 2020

Medium Term Trend: ↓Down (Changes to up above 9800)

Held Yesterdays low: Nifty opened weak around 8850 levels but didn't stay there long. It moved cautiously and hit a intraday high of around 9050 levels and finally closed around 9k levels up 70 odd points.

In previous post we had mentioned that weakness or fall from 9250 level has broken the upward momentum and if we see further weakness below todays low ( 8850) then nifty can fall even more. On the other hand if we see a fast retracement above 9100-9150 levels then nifty will be back on track and can move back again above 9500 and higher levels.

Today Nifty did protect yesterdays low and more importantly the gap zone which stands at 8800-8900 levels, is protected too. Having said the fall yesterday has broken the momentum for immediate term and Nifty needs to move back again above 9150 levels to signal resumption of momentum/Upmove. Today Nifty's move from 8850 appeared slow and momentum/force was missing which could be due to weekly expiry but still it could be a indicator that its just a pullback rally. If Nifty fails to cross above 9100-9150 levels then we can see another wave down towards 8800 levels.

Overall, from a long term perspective, we continue to believe that Nifty has completed (or is in process of completing) a major correction around 8500 levels, though we did fall below this level but the weekly and monthly close always came above 8500 levels which is validating our views (for now atleast).

For next 1-2 trading sessions one need to see if nifty is able to cross 9100-9150 with momentum and force and if that happens then we can hope for the resumption of up-move towards 9500 and 9800 levels. On the other hand sideways or lethargic movement below 9100-9150 levels could once again push nifty back to 8800 or lower levels once again. We continue to advise against going short in this market but look to enter longs only at crucial breakout zones.

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Nifty Analysis: Outlook and Trend for 16th Apr 2020

Medium Term Trend: ↓Down (Changes to up above 9800)

Surrendered all Gains: Nifty opened with a gap-up and went on to touch 9250 levels, however it couldnt sustain there and in the second half of trading session slipped again below 9000 levels to close at 8935 levels.

In the first half Nifty was up 250 points and then in the second half it was trading 100 down. The way Nifty fell from 9200 levels and below 8900 levels ( which was the low of previous session) does raise some question marks on this rally/upmove which started from 8k levels. Ideally we would have liked Nifty to protect previous session low (especially after a solid gapup opening).

In our previous posts we had been mentioning about the possibility of Nifty moving above 9k levels towards 9500 and then towards 9800. Though Nifty touched 9250, todays fall does seems to have put a small brake on this overall upmove. Now its possible that entire fall is retraced immediately in next 1-2 trading sessions and Nifty once again moves back above 9100-9200 levels. If that happens then our old view will continue to hold, however if we see followup weakness below 8850 tomorrow ( below todays low) then its likely that Nifty remains weak for some more time and may not move towards 9500 in a hurry. If that happens then we will have to reassess the short term scenario.

9k levels has now seen too much congestion, and usually whenever congestion are formed they are taken out. Now unless we start seeing sharp falls and Nifty once again drops towards 8k levels ( chances are pretty slim) there is a possibility that market will eventually break above 9100 levels and move towards 9500 levels.

So in summary, todays move was indeed disappointing and Nifty failure to move and close above 9100-9150 levels has put a small brake or question mark on this ongoing rally, however if we see a move again above 9100 levels in next 1-2 trading sessions then probably todays fall was just an oneoff thing which can be ignored and we can once again expect markets to make a move towards 9500 levels. On the other hand more weakness below 8850 levels could delay things and push nifty back towards 8500-600 levels. In either situation stay away from indulging on the short side and if Nifty start trading above 9100 levels then look to enter long positions.

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Nifty Analysis: Outlook and Trend for 15th Apr 2020

Medium Term Trend: ↓Down (Changes to up above 9800)

Pull Back: Nifty opened weak around 9050 levels and traded in a tight range between 8900-9100 for most part of the day and closed right at the mid point of this range @9000 levels.

Volatility was relatively less today and broadly Nifty continue to move in line with our expectations hence we continue to maintain our old view as of now.

Last Wednesday Nifty had made a shooting star pattern and we had mentioned that trade above or below the high/low  (9100- 8650) of shooting star candle will be interesting to watch and could define the near term trend of the markets. Since last 2 trading sessions markets have tested the high twice but not yet convincingly moved above it. However there are other indicators which are suggesting that Nifty can move above 9k levels and then towards 9800 levels in near term.

Last Thursday, Nifty had seen a gapup opening and the gap stands at 8900-8750 levels, today inspite of the weaknesss the gap area supported Nifty. Holding this gap area for next couple of trading sessions will be yet another positive thing for Nifty.

So will keep it short today, nothing has changed in markets and shorterm positives continues to outweigh negatives therefore no reason to change our views yet. A succcessfull move above 9100 levels could push Nifty towards 9400 and 9800 levels (above 9800 the medium term trend will change to 'up' as well). On the downside, 8900-8800 area is likely to offer good support so this area can be utilised to initiate fresh long positions with a Sl of around 100-150 points. A break of this level could push Nifty back towards 8600 levels though.

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Nifty Analysis: Outlook and Trend for 9th Apr 2020

Medium Term Trend: ↓Down (Changes to up above 9800)

Shooting Star: Nifty opened weak today but quickly moved into positive territory. It once again kissed 9100 levels and  moved lower towards 8700. It almost closed flattish at 8750 levels.

Nifty made a shooting start pattern on the daily charts today ( shooting star is characterised by a long shadow and very small real body). Nifty opened around 8700 made a quick dash towards 9100 and again came down. Such patterns are usually trend defining or trend changing patterns. Whenever markets make such patters it becomes interesting to see how market trades above and low of the days high. So going forward trade above 9100 and below 8650 becomes intresting.

In Last post we had mentioned that in case nifty moves above 9050 levels, it will be a second confirmation signal that markets are probably ready to change the trend to the upside now. Even though Nifty failed to close above 9050 levels and just made a quick dash over it, it is a good enough sign. Market is continuously giving signs thats perhaps its done with downmove for now.

Last time (few days back) when Nifty had touched 9050 levels, it had dropped back to 8k levels, a similar script seems to be playing out again but I doubt if thats how it will turn out once again ( it might, but chances are against it for now).We have seen a faster retracement of fall (fall from 9050 to 8050 took 4 days and now same is fully retraced in just 2 days) and as per technicals, its a classic reversal sign. Now we need to see if market again moves back above 9k levels and take out 9800 levels as well, that will change the medium term trend to UP for good.

So will keep it short today as our views have not changed and we have got a second confirmation which suggests that trend could be changing now. Avoid short and look to enter long positions.


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Nifty Analysis: Outlook and Trend for 8th Apr 2020

Medium Term Trend: ↓Down (Changes to up above 9800)

Back with a bang: Nifty opened with a smart gap up around 8400 and didn't look back, it kept on marching on & on and even crossed 8800 levels. Settled finally at 8792. Up by whopping 700 points.

In yesterdays post we had mentioned :-

"a move above 8300-8350 levels can push Nifty back towards 9000 levels if that is taken out  (faster retracement of E leg of Extracting triangle as mentioned in the previous posts) then we are going straight towards 10K levels".

We further mentioned that:-

"the fall from 9100 to 8000 levels ( last few days) is appearing tired and slow. Move on the downside has to be sharp and quick, whenever we see slow falls, the chances are its just a correction and market will start moving up again once its done."

Nifty opened around 8400 and touched 8350 once and zoomed towards 8800 levels. We had also been mentioning about market forming a bullish 'extracting triangle' and 'falling wedge'. Friday market dropped to around 8100 levels which was near the breakout area of falling wedge( more about it can be read in the previous post here - Update for 31st.

Taking support/bouncing from 8100 level and crossing above 8400 level is a very bullish sign indeed. It is a first sign or confirmation that the fall from 9050 to 8100 levels was just a correcting move and that probably mkt is ready to change trend now, for a second sign/confirmation we need Nifty to move above 9050 levels in next 2-3 trading session. If that happens then we could say that 'extracting triangle' is probably done and is power could push Nifty really high ( like the bearish extracting triangle which formed around 12K area had pushed Nifty lower). For a final confirmation we would then be needing Nifty to cross above 9800 levels that would change the medium term trend to 'up'.

In case we do see Nifty moving above 9050 levels in next couple of trading sessions that all short term short positions should be exited as the next logical target is 9800-9900 for Nifty. As far as trading is concerned we added long around 8570 levels today and further recommend entering long positions in case Nifty manages to move up above 9050 in next few trading sessions.

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Nifty Analysis: Outlook and Trend for 7th Apr 2020

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

Below 8100: Nifty opened with a small gap and traded in a small range between 8200-8100 for most part of the day on Friday and closed just below 8100 levels down 170 points.

Nifty has dropped to 8100 levels which is the breakout area of the falling wedge failing to hold this level and further weakness below 8050 levels could push nifty back to 7700-7800 levels. However whenever market has dropped below 8500 it has always managed a comeback in next few sessions. Regular reader of the post are aware that on monthly charts, at levels around 8400-8500 Nifty is more or less done with corrections which is in line with previous major falls seen earlier ( in 2008-1999 & 1992).

In March even though we fell below 8000 and all the way down to 7500, the monthly close came above 8500 levels which furthers strengthens our view. However we had also mentioned that we should not be seeing too much weakness below 8500 and not for too long. For this month its very important for nifty to make a close above 8500 levels agian and then in subsequent months these levels around 8k should not be tested again.

Long term support line ( which only got tested once in last 20 years) was broken temporarily in March however the monthly closing was above it. So even though it had raised few doubts, for now it holds.

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Also, the rise from 7500 to 9100 levels is apprearing impulsive on the daily charts whereas the fall form 9100 to 8000 levels ( last few days) is appearing tired and slow. Move on the downside has to be sharp and quick, whever we see slow falls, the chances are its just a correction and market will start moving up again once its done.

In summary, keep an eye on 8050-8100, if we see sustained selling below this level then mkt can go down to 7700-7800 levels once more and if even these levels are broken then we could be looking a very long and painful correction ( not so much price wise but time wise). On the other hand a move above 8300-8350 levels can push Nifty back towards 9000 levels if that is taken out  (faster retracement of E leg of Extracting triangle as mentioned in the previous posts) then we are going straight towards 10K levels.

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