Nifty Analysis: Outlook and Trend for 12th May 2020

Medium Term Trend: ↓Down (Changes to up above 9800)
Not sustaining opening highs: Nifty yet again opened strong and yet again surrendered all its gain  intraday(more than 200 points) to close with minor losses. 

This trend of Nifty opening strong and then giving up all gains before close is becoming regular now. In last 6 trading session this has happened 4 or 5 times. Fridays move above 9300 had raised a hope  of markets testing 9500-9600 levels however after seeing todays movement, its possible that we may see some more sideways trading/consolidation/weakness before we start reclaiming 9500+ levels.

Todays movement is crucial as it has formed 'bearish engulfing' pattern on the daily charts also the close has come below Previous days session low. All these things are now raising questions if the consolidation of last 4 trading session was just a corrective move ( B leg) to the fall from 9850 to 9150 (A leg). If this is right then we are likely to see more dip ( C leg probably).

Level around 9300-9400 have become a thorn in the flesh for bulls and they are not being able to cross it inspite of trying many times. Quick jump towards 9800 on expiry day turned futile as markets opened with a huge gapdown the very next day and formed a bearish island reversal pattern on daily charts. Now even after 5-6 days, the gap still stands which is a worry sign for bulls. However keep in mind we have seen such scenario playing out in past as well and each time Nifty managed to move up eventually. But lot of choppiness and sideways movement (especially timewise) is observed before that happens so one needs to be prepared for that.

In Summary, Niftys inability to take out 9300-9400 levels or to  fill the bearish 'island reversal gap' has raised a possibility which suggest that the fall which started with a gapdown from 9850 levels is not yet complete. Today Nifty has formed 'bearish engulfing pattern' which is lending further credibility to this theory. Trading below 9220 levels could Push Nifty towards 9150 and 9000 levels ( however in present scenario we are not expecting Nifty to go down much below 9k levels).

For positive scenario to play out, Nifty must take out 9440 level and then it should go on to fill the gap ( stands at 95000- 9700 levels). Overall pattern still remains down and till the time the gapdown area is not filled, its likely to remain so.

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Nifty Analysis: Outlook and Trend for 08th May 2020

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

Stuck at 9200: Nifty opened weak below 9200 and continue to trade around this level for most part of the day and even closed at 9200 too, down 60 odd points.

Nothing much has changed since our last update and as mentioned in the last post we continue to observe markets for now.  Right now its too early to conclude if markets have opened a fresh leg on the downside at the same time its also confirmed that one wave of up move has also got over at 9800 levels.

Now we need to see if markets open a fresh wave on the upside or signal start of a fresh down move. 9000-9100 zone ( as mentioned in previous post too) continue to be an important zone and it only got tested briefly yesterday when Nifty dropped to 9120 levels so we cannot rule out another move towards 9000-9100 levels.

On the upside, 9400 now has emerged as strong resistance, the Monday gap down area still stand and Nifty has formed an 'island reversal area' at that level. Nifty continue to hover in between 2 critical support and resistance points hence we continue to remain in 'wait and watch' mode for now.

If Nifty manages to move strongly above 9350-9400 levels and Nifty start filling up the gap down area then there is chance of Nifty testing 9800-10K or even higher levels however if 9000-9100 level breaks then there is a strong possibility of Nifty retesting 8500 or lower levels.

OI in market continues to be extremely light which is suggesting that we may not see sustained down move from these levels. But that's just one of the indicator , as always the most crucial indicator is 'price chart' and same is indicating breakout or breakdown only once the levels mentioned above are taken out.

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Nifty Analysis: Outlook and Trend for 05th May 2020

Medium Term Trend: ↓Down (Changes to up above 9800)
Weakness to the fore: Nifty tumbled today to close around 9300 levels, down by a whopping 550 points.

9800 was the keep pivotal area for medium term and we repeatedly had mentioned that Nifty upmove could stretch till 9800 zone but further gains are likely only when this level is successfully crossed. On Thursday Nifty did manage to close above it but failed to give 2 consecutive closes above this level. Since Thursday was expiry day, we needed one more close above 9800 to confirm if the level is actually broken.

Todays sharp fall has put a brake on the recent upmove and raised doubts if market has reversed from here. In our opinion its too early to conclude anything and we need to observe markets a little more to make a sense of whats happening. Nifty can still make another dash towards 9800 levels and if weakness persists then a drop towards 8500-8700 levels is also a possibility from here.

On the downside levels around 9050-9100 assumes lot of significance and could be the last support for bulls. If its broken then chances are markets will fall towards 8500-8700 levels. On the other hand to keep the bullish possibilities open Nifty must fill the 'gapdown' it has formed on daily charts. On Thursday Nifty had opened with a gap up around 9650 levels and today the same gap-up is negated by a 'gapdown' (this is called island reversal pattern). Island reversal pattern is a bearish reversal pattern and has bearish implications (if the gap down area is not filled up in next few trading sessions).

For now the strategy should be to wait and watch!

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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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