Nifty Technical Analysis: Outlook and Trend for 11th Sep 2020

Medium Term Trend:  ↑UP (Changes to down below 11275)

Back at 11450:  In the last couple of days Nifty has shown remarkable resilience and moved from sub 11200 levels back towards 11450 levels.

Yesterday, markets broke below 11275 and dropped to 11180 level but managed to bounce back and closed just above 11275 levels. 11275 is turning out to be extremely resilient and strong support (much stronger than what we had anticipated it to be). Yesterday it was protected on closing basis and today we saw a sharp bounce back from there.

Now in last couple of posts we had a bearish tone and suggested that things are not looking bright for bulls and markets could see some accelerated selling from 11300 levels. We had also mentioned that its highly likely that markets will break below 11275 levels But we kept the medium term trend as 'up' till we saw a closing below 11275 levels.

Move which we have seen in last 2 days has the capability to change the short term trend again (to up) provided market manages to move above 11520-540 levels in next 1-2 trading sessions. A successful move above these level could be an indicator that correction is over and market has resumed its uptrend towards 11800 or higher levels.Next couple of days are going to be crucial and it will be interesting to see which way Nifty moves. Twice Nifty has seen sell off from 11450-60 levels and incase we see sell off again and Nifty goes below 11300 then once again bearish possibilities will start opening up.

Another thing worth mentioning is the formation of bullish island reversal pattern on chart. Yesterday we had seen a gapdown opening and today the same gap area is filled with a gapup. This Gap stands around 11300-330 levels so for any bearish scenario to unfold this gap area should and must be filled in next 2-3 trading sessions.

So in summary, things have changed in last 2 days and even though we did see some selloff below 11275 levels, it was short-lived and markets bounced back above it on the same day. Now if 11275 holds and market moves above 11520-540 levels, then we are once again looking at higher levels towards 11800 Failure to do that and moving back below 11275 levels could be a sign of some deeper correction to come.

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Nifty Technical Analysis: Outlook and Trend for 9th Sep 2020

Medium Term Trend:  ↑UP (Changes to down below 11275)

Failed to move above 11450: Nifty today opened flattish but soon moved above 11400 levels. It continued to trade between 11400-440 but failed to move above it and crash towards 11300 in the end.

In the last post we had mentioned "its highly likely that market near term trend has changed down but we would like to see a close below 11275 levels just to be totally sure"

Now its been two trading sessions and even though Nifty has managed to protect 11275 on closing basis, it has failed to move up and any sizeable rally has not been seen and today it has again closed almost at support level. Thing about strong support/resistance levels is that they shouldnt be tested again and again and markets should ideally just kiss them and move away.

The way Nifty is trading since last few days is clearly giving indications that markets are probably tired and don't want to move up immediately and probably wants to correct a bit more from here. 11450 has now emerged as a very very strong resistance for Nifty. Markets had failed to move above 11450 on Friday (it touched 11450 and crashed to 11300). Same is seen today as well, Nifty touched 11440 levels and crashed to 11300 levels. All these are indication of weakness and are clear warning signs hence its time to be super cautious. Nifty is not yet done with the correction and can attract more selling from here hence holding long positions without proper SL can prove to be very risky.

So in summary, failure to move above 11450 levels has clearly indicated that for short term, market is in a bearish phase. For medium term too we are tempted to change the trend but will do it once 11275 breaks (which is looking very likely now). Weakness below 11300 could spiral into more selling and push Nifty lower from here (towards 11000) hence be careful. For any bullish scenario to emerge, we need a move above 11550-575 levels pretty soon now.

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

To see our recent trading calls for Nifty Algo- Pls click ⤇  Past Trade summary (updated till 31st aug).