Nifty Analysis: Outlook and Trend for 04th May 2020

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

Splendid expiry: Nifty managed to move and close above 9800 levels and put on 300+ points to close at 9850 levels.

Nifty has closed above our critical pivotal level however we would like to see 2 consecutive close above 9800 to finally confirm if the trend indeed has changed hence for now keeping the trend as down only. Usually the movement witnessed on expiry day is governed by position in F&O space rather than anything else and that is the reason it cannot be trusted fully. Till 3PM Nifty was trading below 9800 and shot up above 9800 levels in last 15-20 mins hence we need one more close above it to confirm. Most probably the trend has indeed changed but it wont cause any harm in waiting for one more close.

Another thing to note is that on hourly charts markets have now turned overbought. Yes, all these while we were saying that markets are oversold but now things are changing and markets have turned overbought on hourly charts hence some consolidation or sideways movement from current level is possible.

Reliance results that came yesterday evening were bad and global markets are also not doing well today. While this post is being updated, Nifty future on SGX is trading at 9400 down 450 points so considering everything it makes sense to observe markets a little more from here. If markets takes support around 9400-9500 levels and start moving up again and conquers 9800 levels once more then  probably the trend has changed for good but if we keep drifting down and goes on to break below 9200 then it opens up bearish options once again.

Keep in mind that even if the trend changes to upside, its not going to be a smooth ride for Nifty. We will keep seeing pullbacks but the overall direction will be on upside.

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Nifty Analysis: Outlook and Trend for 30th Apr 2020

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

Gaining strength: Nifty moved strongly today and touched 9600 zone which was our near term target of Nifty as well.

We had always maintained that levels around 9500+ were likely and even though 9300 was acting as a formidable resistance it may not last forever. We have also been mentioning that if Nifty can move around 9800 levels that would be a big positive and change the medium term trend for the markets.

Now that Nifty has reached within striking disntance of 9800, things have become interesting. This zone of 9700-9800 is extremely critical and important. Mind you 9300-9350 was broken after a long struggle hence one should continue to look out for cues incase this turns to be just a false break or bull trap.

Moving further from here and crossing 9800 levels will be a strong bullish sign and settle things in favour of bulls and could push markets towards 10500 and even 11K levels. However if we drop below 9400-9350 levels then that could halt the progress of current move and markets could fall further towards 9k levels once more. From trading perspective its a good idea to book profit around 9500-9600 and observe markets before taking fresh trading call ( that's what we have done).

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Nifty Analysis: Outlook and Trend for 29th Apr 2020

Medium Term Trend: ↓Down (Changes to up above 9800)
Nifty @ 9400: Nifty continued the upmove started yesterday and moved above 9400 levels. It closed at 9380 with a gain of around 100 points.

Yesterday we had mentioned that short term trend continues to be on UP for now (inspite of 100 points slippage from 9380 to 9280 levels) and its likely we see some more gain from these levels. Today Nifty was trading nervously around 9300 ( which has proven to be a stubborn level in short term) but finally managed to pulled it off. Now couple of very important things to note.

Levels around 9300-9350 have become a very obvious resistance hence its not surprising that market has moved above it however in such cases its not very unusual or uncommon to witness a 'false breakout', that is market moves above resistance to creates an impression that its broken and then again moves down. So this is something we should keep in mind going forward and should look out for cues (incase this turns out to be a false break or bull trap).

Secondly on weekly and daily charts market is continuously forming shooting star/inverted hammer/Gravestone doji kind of patterns. These patterns has the power to start a new short term trend on either side. Friday and Monday Nifty had formed 'gravestone doji' and today we again have 'shooting star/hanging man'.

Appearance of shooting star after a long consolidation and at top area ( above key resistance level) can again be bearish (but only if lows of previous days are breached). In case Nifty break below 9260-75 levels  again then that would be the time to get cautious once again. Till then higher levels around 9500-9700 are still very much possible from here.

In Summary, market is approaching critical levels and a further push towards 9500+ levels is likely but one needs to keep a close eye on any 'false break/bull trap' forming here. Move below 9260 levels could signify end of this short term trend. Trade accordingly.

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Nifty Analysis: Outlook and Trend for 28th Apr 2020

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

9300 Returns: On Friday, markets had seen weakness and had closed with a loss of around 160 points. Today even though markets slipped 100 points from day high, it managed to cover most of the losses of previous trading session.

We had turned cautious and Mildly bearish on Friday, the way Nifty had turned without making a new high was raising question if the current rally is over ( at around 9330 levels instead of 9500-9700 as we were expecting previously. However todays gap up and 100% retracement of Fridays fall again opens up the possibility of Nifty testing 9500+ levels.

9350 level is turning out to be a formidable resistance but this could give way anytime. Infact more Nifty hangs around this level , more the chances of its break on the upside. No resistance or support should be tested more than 2-3 times Here we have spent almost 1 month at same level. This remind me of Nov'18- Jan'19 period. During this period Nifty kept falling from 11K levels to 10500-10600 and after a struggle of 10-12 weeks it finally managed to break it on the upside.

So its very much likely that 9300 will eventually be taken out but its also likely that Nifty drops once more towards 8500 levels before it does that

On weekly charts Nifty has formed back to back shooting star and on daily chart, Fridays daily candle was 'gravestone Doji' (where market opens and then move higher but returns back to opening levels just before close) and today again we have another 'gravestone Doji' on daily charts. Gravestone Doji can change the near term trend of the mkts & start a trending move on either side (can be both bearish and bullish). Nifty did manage to cross Fridays high but now todays high (9380) become another critical level to watch out for & on the downside 9130 becomes the all important level. Below 9130 we will have a lower low and if Nifty breaches that then the sequence of higher low will be negated and it could have bearish consequences (for immediate term).

Just to summarise, Fridays fall had turned us cautious and we were expecting markets to fall however todays move back above 9300 ( inspite of 100 points slippage from 9380) proves that it was not to be & that short term trend continues to remain up for now. Fall below Fridays low ( around 9130 levels)  could be a game changed for short term and fresh shorts are only advised below once it breaks. Holding the same can push Nifty back towards 9500 levels. Markets continues to be choppy but this can change anytime.

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Nifty Analysis: Outlook and Trend for 27th Apr 2020

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

Weakness Resurfaces: Yesterday Nifty had closed above 9300 but failed to close above 9330 levels. Today it again dropped below 9200 and closed with a loss of 160 points at 9150 levels.

Since last few days we had been mentioning that markets could head towards 9500-9700 in the short term and we saw quite a few attempts by markets towards 9300 level from lower level of 8600-8900.

Now looking at todays trading and how the charts are shaping up, there is a possibility that the upmove we were expecting towards 9500+ levels got truncated at yesterday high of 9340. Till now whenever Nifty was falling towards 8800-8900 levels we were always cautiously optimistic but this has changed significantly today. lets see what has changed on charts in just one trading session.

This is not the first time markets have retraced back form 9300 levels but till now whenever markets had fallen, they had fallen after hitting a 'higher high' on the daily chart. This time, however the fall has come from a 'lower high' which is a negative signal.

Secondly, it was important for Nifty to have weekly close above 9330 levels ( which was the previous week high). Last week Nifty had formed an shooting star/hanging man kind of pattern which has bearish implications if its highs are not crossed. Nifty failed to take out its high and in the process posted yet another shooting star on weekly chart. Emergence of back to back shooting star on weekly chart that too after a recent rally from the lows of 7500 could be a sign of fatigue and warrants caution at current levels.

And lastly, the entire move from 7500 to 9300 levels is beginning to look like a ascending triangle and the B-D line of this triangle got broken today ( which again is a bearish sign).

Market overall trend was always down ( needed a move above 9800 levels which is still very far away) but the things on the short term were offering some positivity (like higher lows) however now there is a possibility that even short term trend changes to bearish and market start correcting the entire rally of last 1800+ odd points (7500-9370). If that happens then we can fall towards 8500-8300 levels once more before markets can start moving up. Level around 8912 becomes extremely crucial now if that breaks, then markets will confirm  lower high and lower low pattern. To negate this entire bearish view we need a strong move above 9340 levels which sustains for entire next week,

Till now we  were suggesting to avoid shorts but now situation has changed slightly and its time be cautious if you are on the long side (try to book profit and keep a tight SL) . 8900 should be the final Sl for all long Positions (further 250 points to go from here). Below 8900 there is no point holding on to long positions. If one has a short position then it can be carried with a SL of around 9400 levels.

So in a nutshell, don't take todays fall lightly and become cautious. Markets inability to cross 9300 could push it back towards 8500-8300 levels and 8900 level becomes the key level now. Below 8900 levels, bears will extend their grip on the markets. For bulls to have any chance we need a fast and sustainable move above 9350 levels (which is now looking a bit difficult to achieve in near term).

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Nifty Buy/Sell Algorithm