Nifty Analysis: Outlook and Trend for 9th Jun 2020

Medium Term Trend: ↑UP (Changes to down below 9500)

Tumbles from 10300: Nifty opened strong above 10300 levels but couldn't sustain above it and started sliding down. It gave up most of the gains ( around 150 points) in second half to close at 10167 levels, up 25 points.

In previous post we had mentioned that "Monday if Nifty sustain above 10170 levels then it can further move towards 10300 levels".

We did reach towards 10300 levels (infact opened there) but failed to secure any more gains beyond that and moved back towards 10150 levels.

Now the broad directions of the market remains on the upside but Nifty is making some interesting pattern in last few days which is suggesting that probably ( I say probably) some bit of correction/sideways movement is still pending hence we might not see this rally extending immediately, we may take a pause and only after that we see a fresh move on the upside.

Now lets discuss what we mean by 'interesting pattern'. Since last 4 days Nifty is opening higher but then moving down, call it profit booking or shorting it doesnt matter. What matters is that its not able to put up any gains after opening and always closing below the opening price. Now this is not a very good sign and could signal that markets are possibly still in a corrective phase ( for a short term perspective). On top of it our own momentum indicator is not able to make a new high (inspite of Nifty touching a new high and moving beyond 10300).

Going forward we need to see if Nifty manages to move 10330 levels, as further gains for now are likely above 10330 only. On the downside 10130 & below that 10050 will act as a support. If these levels breaks then we could fall and retest 9900 levels.


As far as trading is concerned, we had entered long position around 10130 levels on Friday which we exited around 10300 levels today ( we could see the momentum losing hence didnt find it appropriate to hold on to longs). If someone is still long in market then he should exit if market trades for more than 30-45 mins below todays low (10140) and then wait for a fresh opportunity to enter longs.

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Nifty Analysis: Outlook and Trend for 8th Jun 2020

Medium Term Trend: ↑UP (Changes to down below 9500)

Rally resumes: After a very brief pause, Nifty once again moved up and crossed 10150 levels. It closed at 10140, up 110 points.

Since last couple of days we had been mentioning that its possible we see some sort of sideway move or correction before the up-move resumes however we had also mentioned that this should not be seen as fresh bearish move and Nifty can turn again on the upside anytime. We did see some pause but it lasted for just 2 days and 200 points.

Nifty had a resistance around 10100-125 levels and it sustained this level in the opening session today which once again has opened up possibilities of a fresh up-move by Nifty hence levels around 10100 could have been utilized to enter fresh long positions in the markets today.

Monday if Nifty sustain above 10170 levels then it can further move towards 10300 levels. At the time of writing this post SGX Nifty is already trading around 10300 levels ( however we don't give too much weightage to SGX Nifty).

So will keep short today. Overall Nifty is in a strong up trend and there is lot of disbelief and skepticism about the sustainability of this rally and frankly this is what making Nifty strong. There is nothing on the chart which is suggesting an immediate reversal from here ofcourse pullbacks and correction of 200-300 points can come at any time but for any big reversal its important 9800 level is broken first and then 9500 (which is our new pivotal point from medium terms perspective). From trading perspective 10100 is a good level to enter long and can be held with a SL of around 10k levels.

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Nifty Analysis: Outlook and Trend for 5th Jun 2020

Medium Term Trend: ↑UP (Changes to down below 9000)

Nifty Cools Down: Nifty witnessed some bit of profit booking today, it dropped towards 9950 levels and then pulled back up again above 10k levels to close at 10030 down 30 odd points.

We had mentioned yesterday that Nifty is looking a bit tired. We had written:

"Now looking into the charts we can definitely see some sort of tiredness creeping in so there is no harm in booking full/partial profits at this stage. looking at levels, if Nifty trades below 10050 tomorrow then it can fall to 9970-80 levels"

Today we did drop towards 9970 and broke it so some more weakness in the short term can not be ruled out in coming trading sessions. But mind you this weakness should not be construed as a fresh bearish move but just a pause before the next rally begins. This view is valid as long as Nifty is trading above 9700 levels. As long as the gap-up area holds , Nifty remains strong. Now Nifty may or may not visit 9700, thing about such corrections is that it can finish anytime and at any levels hence one is advised to look for trading options on the buy side.

We had mentioned yesterday that its good to book profits at current levels, Nifty is down around 150-200 points from yesterdays high already. For now we need to observe markets see what shape or form this correction is taking and take a trading call only once we see confirmation on the charts.

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Nifty Analysis: Outlook and Trend for 4th Jun 2020

Medium Term Trend: ↑UP (Changes to down below 9000)

Upward March continues: Niftys relentless rise continued and today it hit a high of around 10170 levels and closed at 10060 levels up 80 points.

Nifty opened around 10170 but faced some profit booking at higher levels which dragged it down slightly. Overall Nifty has been rising since last 8-10 days and from the lows of 8800,it has touched 10200 levels which translates to a rally of almost 1400 points in 10 days is ( 140 points each day). This is massive and huge and most importantly taken traders by surprise.

Now since markets have run up so sharply some slowing down or sideways movement is possible at these levels. Momentum indicators are slowing down which are also suggesting a possible pause. Mind you this doesn't mean one should go and short (that ship has sailed long back). Trying to short this market thinking that its top area can be extremely dangerous and must be avoided. Traders should look only to buy in this market.

Now looking into the charts we can definitely see some sort of tiredness creeping in so there is no harm in booking full/partial profits at this stage. looking at levels, if Nifty trades below 10050 tomorrow then it can fall to 9970-80 levels and if 9970 levels breaks, then we can see some more weakness/profit booking. Having said this the levels around 9700-9750 ( bullish island reversal area) supposed to provide a very strong support and its highly unlikely that markets will break these levels now ( less than 20% chance).

As far as trading is concerned, profit booking is advised at these level and if 9975 breaks tomorrow and sustains for 10-15 mins then one should book 100% profit and sit out for some time. We also booked 100% profit today and would prefer to sit out and observe markets for few days before taking next trading call.

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Nifty Analysis: Outlook and Trend for 2nd Jun 2020

Medium Term Trend: ↑UP (Changes to down below 9000)
9800 Conquered: As we have been suspecting since last few days, Nifty finally managed to close above the critical level of 9800 hence overall trend of the market is changed to 'UP' now with a reversal pegged at 9K levels.

Last time when Nifty had closed above 9800 levels (April Expiry day), it was not very convincing ( hence we kept the trend as down only) and markets reversed 500 points the very next day. However this time looks like its done for good. Last time the trend was moved to 'down' was way back in Feb when Nifty broke below 12K levels now after 3.5 months the trend is changed to 'up' again.

There are couple of interesting things which have happened in the markets today. Lets see the daily chart of Nifty to analyze what are those.

Nifty Hourly chart

1: The previous island reversal area ( 9750-9600) area is closed today. We had been saying all this while so that is not at all surprising however what is surprising is that the bearish "island reversal" area is taken by yet another gap-up turning a bearish 'island reversal' into a bullish 'island reversal' Now I am not sure when was the last time such a powerful bullish pattern ( this indeed could be very powerful) was seen in Indian markets.

2.If you see the entire fall from 9850 levels to 8823 levels had taken Nifty 11 days now the complete fall is retraced in just 9 days. This faster retracement is a classic sign that market is shifting gears and trend is changing and already changed now(though we had predicted he same when Nifty was just at 9k levels). Hence now there shouldn't be any doubt in any ones mind about the direction market is going towards.

Now going forward, we see strong support in 9600-9750 area for Nifty and any fall is likely to be arrested around these levels. Nifty now in all probabilities heading towards 10k+ levels ( mind you pull backs will continue to come from time to time and one need to be careful). 9950-10050 levels used to be the old support levels for Nifty hence some sort of resistance is expected around these levels. Overall mkts are still in slightly overbought zone for short term ( but that doesn't mean its a sell signal).

As far as trading is concerned, we had entered long @ 8950 levels which still continues as of date ( Nifty is up around 1000 points from our entry price)

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