Nifty Analysis: Outlook and Trend for 24th Jun 2020

Medium Term Trend: ↑UP (Changes to down below 9725)

 Nifty Exhibiting Strength: In yet another display of strength, Nifty posted 150+ gain today to close at 10470 levels.

In previous post we had mentioned "expect markets to remain strong as long as 10100 holds)/ Short covering is likely to continue in coming sessions as well which can push Nifty in 10450-10550 zone"

Current rally is mostly driven by short covering and now that we have moved conclusively above 10350 levels the short covering more or less seems to be done with. Going forward further upside will depend on how much actual/followup buying Nifty can attract from here. Nifty is now nearing its intermidiate target which is around 10500-550 levels so we can see some halt/pause at these levels ( but its not mandatory). Holding 10500-550 could even push Nifty towards 10800.

On the downside good support now exists in 10200-250 zone and weakness in Nifty is likely only once 10200-250 zone is taken out till then Nifty remains strong only.

Overall the pattern from the lows of 7500 is looking like one 'rising wedge' which seems to be in its last (E) leg.  The pattern will be confirmed only once its last leg is retraced fully i.e Nifty drops below 9725 levels. Dropping below 9725 could have significant bearish implications but will discuss about it only when it happens/about to happen. For now its just a possibility which we should keep at the back of our mind.

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Nifty Analysis: Outlook and Trend for 23rd Jun 2020

Medium Term Trend: ↑UP (Changes to down below 9500)
 Nifty March Continues: Nifty had another positive session today and almost touched 10400 intraday. It gave up some of the gains to close at 10310 levels, up 67 points.

In the last post we had mentioned "In last 2 days we have seen quite a bit of short covering and its likely to continue till expiry atleast. There are still few shorts in the system ( probably holding with a SL of 10300 odd levels) therefore there is a high probability that markets will make a move beyond 10300 levels now ( probably towards 10500 levels)"

Well the short covering continue to take place which is pushing Nifty higher and higher and since Nifty closing level today was below10330 (which was previous swing high), our guess is few shorts are still in system hence markets are expected to remain strong atleast till expiry. If there is any correction in store for us then its likely to come only after expiry. Till then markets are likely to remain strong.

Going forward we see some bit of resistance near 10450-10550 zone, and if crossed then Nifty can go till 10800 levels as well before the correction sets in. Till the time there is confirmation on charts for any short term trend reversal, any sort of short selling must be avoided. On the downside 10100 has emerged as very strong support for Nifty and is likely to support Nifty should we see any fall.

So will keep it short today, view is more or less same as of yesterday, and we expect markets to remain strong as long as 10100 holds)/ Short covering is likely to continue in coming sessions as well which can push Nifty in 10450-10550 zone ( & towards 10800 above that). For any bearish option to open, we must see a quick fall below 10100 levels in next 2-3 sessions.

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Nifty Analysis: Outlook and Trend for 22nd Jun 2020

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

 Building Strength: Nifty continued its upward march and touched 10250 levels. It closed with a solid gains of 150+ points.

Yesterday we had mentioned that if Nifty manages to sustain 10050-11100 levels then further gains towards 10350-550 levels are expected. Bears would have had a chance only if markets had seen a strong fall back below 9900 however once markets opened above 11100 it became clear that markets are headed towards higher level.

Now looking back, Nifty had seen some correction from 10300 levels towards 9500 levels and we had turned cautious as soon as Nifty touched 10300 levels. We did see some sharp fall from those levels and they way Nifty kept reacting from 10k levels had raised a strong possibility of retest of 10500 levels However that didn't materialize ( mainly due to short positions created because of negative news flow around India-China tension).

In last 2 days we have seen quite a bit of short covering and its likely to continue till expiry atleast. There are still few shorts in the system ( probably holding with  a SL of 10300 odd levels) therefore there is a high probability that markets will make a move beyond 10300 levels now ( probably towards 10500 levels).

Overall a correction is due now in our markets but before that happen, we can see one more rally/push on the upside.Overall the entire pattern of last 2-3 months ( from lows of 7500) is looking like a contracting wedge whose E leg ( last leg) seems to have started yesterday. Now it remains to be seen if the pattern indeed develops like a ascending wedge or market has other plans ( wedge usually are difficult to confirm till they are actually completed or are on verge of completion). One needs to continuously observe markets to see how the pattern develops , if it indeed is a wedge formation then we can see another move below 10k once its completed.

In Summary, market near term trend remains up and the way markets are trading is giving an impression there are quite a few shorts still left in system hence shorts squeeze we are witnessing is likely to continue ( probably till expiry).

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Nifty Analysis: Outlook and Trend for 19th Jun 2020

Medium Term Trend: ↑UP (Changes to down below 9500)
Nifty Soars : Nifty opened flattish but continued to move up in a strong trend and crossed 10K levels ( even 10100 intraday) to close at 10080 levels up a solid 200 points.

Yesterday we had pointed out many indicators that were pointing out towards a possible downmove from current levels and had advised caution. We had also mentioned that we are seeing warning sign ahead and with each successive failure to cross 10k the chances of markets moving down are increasing. However with todays move, most of the bearish indicators/factors we were seeing have been negated. Frankly speaking, we didn't expect markets to move the way it has and if it manages to cross 10100 & then hold on to 10050-10100 levels for couple of trading sessions then bulls will further strengthen their position.Negative sentiments surrounding India-China border tensions seems to have played a big hand in pulling markets up (shorts positions had been built up in last 2 days which have been squeezed by the smart money/operator).

Having said this, there is a still a slight chance that move today was just a false break of 10K levels, however for that to come true need a vicious fall tomorrow back below 9900 levels. Spending time around 10100 will only make markets stronger and short squeeze is likely to continue.

Going forward if 10100 sustains then markets in most likelihood are heading towards 10330 and 10550 levels. Entire move from 7500 levels is looing like one contracting triangle or ascending wedge which seems to have completed its 4th ( D) leg and last leg (E-leg) most probably started today. Upon completion of E leg we can see a correction again .So probably the correction we were expecting around 10K levels will come from higher levels ( 10330-10550 or higher). But that is a problem for later date, we will cross that bridge when we get there.

In Nutshell, we were seeing a possibility of a downmove which didnt materialise and market has made a strong move above 10K levels which has negated most of bearish possiblities already ( provided it holds above 10K level for couple more sessions atelast). Now that markets have changed, we have to change as well and since markets have moved above 10K levels ,once again the chances of markets hitting a new high towards 10300 and then 10500 have become stronger hence we change our view.

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Nifty Analysis: Outlook and Trend for 18th Jun 2020

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

Rangebound & volatile : Nifty opened slightly weak but immediately bounced backed above 9900 however once again got stuck at 10k levels and sellers pulled it back below 9900 levels. It closed around 9880 with a minor loss of around 30 points.

Nifty may have closed down with  small losses but point to note is the intraday volatility we are seeing since last few days. Yesterday markets opened super strong 200+ but couldn't held on to its gain and turned -100 ( >300 point fall from day high). Today again markets tried to scale above 10k but Bears pulled it back and as a result it almost lost around 150 points from day high.

Now in previous post we had mentioned "Nifty failed to move above 10k, which was a key requirement and even broke below 9850-9800 levels, this has raised some strong doubts about the sustainability of the recovery we saw on Friday"

We had turned cautious on Monday itself and today we are a bit more cautious then we were before. Though Nifty has not fallen much since Monday, it has not moved up either and looking at charts we continue to advise caution at current levels as with each passing day and with each failure to climb above 10k levels, the chances of Nifty moving down are increasing. Though most of the analyst on TV and youtube are bullish at this moment and predicting 10500 levels in coming few sessions, we are clearly in no hurry to buy Nifty at CMP. Lets see why.

• After Monday, Nifty made two more attempts( yesterday and today) to move above 10k levels but failed both times as a result we can see a 'tripple top' kind of pattern now at 10k levels.  
• On hourly charts, the entire pattern of last 4-5 trading session is looking like one "head and shoulder" pattern with neck line sitting at 9730 levels. which can have bearish implications in coming few sessions if 9730 breaks
• Today Intraday chart, Nifty has made 'inverted hammer' candle which can be both bullish & bearish depending on where it formed, but looking at current chart positioning its looking more of a bearish candle to us.

There are couple of other factors too (cannot be explained here) which are advising caution at current levels. There are warning signs clearly appearing ahead and if 10050-10075 is not crossed with a force, then those might come true as well.

From trading perspective those who are long should keep an tight watch on 9800 levels and if this levels breaks then be on guards. Final level is around 9720-9730 levels ( also the neckline of the H&S pattern) and if that is breached as well then we see no point in holding on the existing long and we recommend exiting.

To join our Nifty buy/sell whatsapp message service during market hours, pls click⤇ Nifty Buy/Sell Algorithm  or whatsapp @ 9319321906

To see our recent trading calls,as soon as a position is closed, its updated here ⤇  Past Trade summary

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