Nifty Tomorrow: Prediction, outlook and Nifty Trend for 09th March 2022

  Medium Term Trend:👇(Down) - Reversal level @ 16700

Nifty @ 15985 up 160 points- pull back witnessed from lows

In our last post we had mentioned "inspite of so much weakness and skepticism, holding 16400-500 levels could push Nifty towards 17K-17100 levels. On the other hand continuous weakness below 16400 could drag nifty towards 16K and lower levels"

Last week holding 16500, Nifty had raised a possibility that a move towards 17K was possible however once nifty broke down below 16400-450 levels the chances of such a reversal became thin and Nifty went below 16k  (it even broke 15700 marginally) but then a sharp pull back at the end of day pulled markets back above 16K levels and from 150 points down at one stage became 150 points up.

Markets have been oversold recently hence its difficult to say if its actually just a technical bounce or some sort of serious pullback. VIX remains high (around 30s) and till the time it starts cooling off market will remain highly volatile. However point to be noted is the weekly RSI had touched 36 this morning and usually when RSI does that its close to making some sort of bottom. lets have a look at the chart below.

Nifty Weekly 2011-2022

Here one can see that in last 10 years or so whenever Nifty weekly RSI has touched mid 30s levels, markets have made some sort of bottom ( with an exception of Jan-2020 which was a covid thing). We had mentioned in one of our previous post that technical level of H&S pattern breakout (neckline at 16900) comes to 15100-15500 & at those level Nifty's weekly RSI will come to around 34-35 levels. 

So most probably areas around 15500 ( give or take 200-300 points here or there) could be the zone where market attempts to make some sort of bottom. Now please note that is not always easy to identify the bottom area in advance. Its only in the future when markets moves up from there that we are able to say that it was indeed a bottom area. Its also possible that bottom was already hit today itself, but till the time we see actuals evidence of markets bottoming out we are going to keep the mid term signal as down only (Earlier view that this could be a range bound market between 16500-18500 is not valid now).

In summary, ongoing weakness in markets could drag Nifty further towards 15400 levels and unless its start of a major bear cycle ( till now there is no evidence that it is one) markets should not fall much below these levels. On the upside holding above todays close and then moving above 16150-200 could be positive for Nifty. Major resistance is sitting at 16650 levels and till the time its not crossed, there is always a fear of markets turning down again.

Happy Trading!

Nifty Tomorrow: Prediction, outlook and Nifty Trend for 03rd March 2022

 Medium Term Trend:👇(Down) - Reversal level @ 17300

Nifty @ 16605 down 190 points- Weakness Continues

In our last post we had mentioned- ".......... Nifty has been making H&S pattern form Dec last year, neckline of same is sitting around 16850 levels. a break below neckline can open downside targets anywhere from16k to 15K levels. hence caution is still advised"

Market failed to move any higher & in next 4 trading sessions crashed to 16200 levels. 'H&S' neckline and much talked about support level of 16800-900 was broken with a huge gap-down. Though Nifty has bounced back from the recent low of 16200, its still trading below 16800-900 ( previous support turning into resistance now?).

Now moving forward we see a lots of skepticism and though quite a few things have been priced in by markets already some additional bad news could drag Nifty below 16k levels. Having said this, markets are hanging around just below 16800 levels which also raising a possibility that worst is probably priced in now and markets could start recovering slowly from here ( hanging just below important support areas after breaking them convincingly is also in a way positive only).

 On a high level, if you remember we had mentioned in previous posts that overall markets could trade in a broad range of 16500-18500. Till now market seems to be moving broadly in this range only. So going forward it will be interesting to see if markets manages to maintain this range inspite of negative news flow.

In summary, inspite of so much weakness and skepticism, holding 16400-500 levels could push Nifty towards 17K-17100 levels. On the other hand continuous weakness below 16400 could drag nifty towards 16K and lower levels. VIX is pointing at 30 which is pretty high so its best to avoid trading for next few days and wait for VIX to cool off.

Happy Trading!!

Nifty Tomorrow: Prediction, outlook and Nifty Trend for 21st Feb 2022

 Medium Term Trend:👇(Down) - Reversal level @ 17650

Nifty @ 17275 down 28 points- Fails to move above 17500

In our last post we had mentioned-

"Breaking of contracting triangle is a very bearish sign for markets. It confirms that initial fall from 18500 to 16450  was a trending move and the recovery we have seen after that (in the form of ABCDE triangle) was just a corrective move. This has opened up bearish targets for as low as 15500"

Now in last 4 days, markets did not exactly move in line with our expectations, and buoyed by news of Russians pulling from Ukraine, bulls pulled the markets back above 17300 levels on Tuesday itself thus negating the impact 'bearish contracting triangle'. Contracting triangles are a very reliable technical patterns and they work more often than not however this time it was not to be.

Having said this, inspite of a 500+ points pull back on Tuesday, Nifty failed to add more strength and closed just below Tuesday high which is keeping the bearish options (and lower targets) open still. Nifty may have been able to negate the contracting triangle, but there is another bearish pattern emerging on a slightly larger scale ( H&S pattern with a neckline at 16850-900) levels.

Nifty daily

In the chart above it can be seen that Nifty has been making H&S pattern form Dec last year, neckline of same is sitting around 16850 levels. a break below neckline can open downside targets anywhere from16k to 15K levels. hence caution is still advised. Usually from our experience, we have seen that any pull back (or pull down) which is based on news flow usually does not sustain and reverses back in coming trading session and if Tuesday's pull back of 500 points was all based on Russia-Ukraine news-flow then there is a high probability that markets will reverse from here. 

To keep bullish options make, Nifty must make a strong push above 17650 levels ( which was previous swing high). On daily charts and hourly charts Nifty is consistently making lower highs which is not instilling much confidence in the bulls camp for now.

Happy Trading!

Nifty Tomorrow: Prediction, outlook and Nifty Trend for 15th Feb 2022

 Medium Term Trend:👇(Down)

Nifty @ 16840 down 530 points- Black Monday & Weakness To The Core.

In our last post we had clearly warned that -

"Failure to sustain above 17600 levels is again pointing to the fact that market is still not out of woods and one more down-leg towards 17K-16800 is very much possible from here"

we had also mentioned that " with each successive days markets internals are getting weaker and the post budget move (17600-17800) is now appearing to look like one giant bull trap"

Last week we had also tweeted and posted  the below chart.

In the chart above, it can be seen that Nifty was potentially making a bearish contracting triangle,  confirmation of which was to come below BD line and same has come today. 

Breaking of contracting triangle is a very bearish sign for markets. It confirms that initial fall from 18500 to 16450  was a trending move and the recovery we have seen after that (in the form of ABCDE triangle) was just a corrective move. This has opened up bearish targets for as low as 15500 ( now not saying that Nifty will definitely going to touch it but its a possibility hence we must be prepared for it.

Nifty has been testing 16850-17000 support a lot of times already and ideally such important supports should not be tested again and again and though Nifty has closed just around this support zone, chances are it might not hold this time. If one is still holding on to long positions in a hope that 16850 will provide support yet again then please be careful.

Till now we had been saying that this could be a sideways phase for nifty (16500-18500) however now we have to change it. This is no sideways market, market is in grip of a strong bear wave and it will be premature to comment where it will end. 

Happy Trading!

Nifty Tomorrow: Prediction, outlook and Nifty Trend for 07th Feb 2022

  Medium Term Trend:👇(Down)

Nifty @ 17516 down 44 points- Weakness Emerging Yet Again.

Nifty continues to remain volatile even after budget and made an attempt towards 18000 levels however it could not sustain above 17600-17700 levels and has again moved down towards 17500 levels.

When nifty moved above 17600 levels after budget, it looked good for a brief period & there were chances of market moving further towards 18K levels. However the failure to sustain above 17600 levels is again pointing to the fact that market is still not out of woods and one more down-leg towards 17K-16800 is very much possible from here. with each successive days markets internals are getting weaker and the post budget move (17600-17800) is now appearing to look like one giant bull trap.

Nifty now has a strong resistance placed at 17675-17700 levels and it must move above it quickly for any bullish scenario to emerge again on the other hand final support exists at 17340-17375 levels below which market could see sharp selling and move down to 17K or even lower levels once again.

In summary, markets are still looking very fragile & in case we do not start trading above 17700 levels but instead keep hitting lower lows and fall further below 17350 levels in next 1-2 trading sessions then more weakness is likely and market could see sharp dips once again. As mentioned in last update, market has taken support at 16800 levels already 2-3 times and this level ideally should not be tested again but if it does then the chances are it might not hold this time around.

Happy Trading!!

 

Nifty Tomorrow: Prediction, outlook and Nifty Trend for 31st Jan 2022

 Medium Term Trend:👇(Down)

Nifty @ 17100- Closed flat

Nifty opened on a positive note & was 250 point + at one point however selling pressure emerged once again and markets gave up all the days gain to close up flat. In the process market formed a 'shooting star' pattern on the charts and it can have strong bearish implications in case we see follow-up selling on Monday (below todays low).

In last post we had mentioned that overall markets seems to be in a range but the range seems quite big (16500-18500). Now looking at charts its possible that we may fall towards the lower end of this trading range (especially if we see weakness below 17K levels on Monday/Tuesday). hence we have changed the medium term indicator to 'Down' for the time being. There are more negative points than positive points on the chart so its better to pick a side instead of waiting on the sidelines.

Now lets talk about some of the points which are bothering us. Firstly, there was a strong pullback which started yesterday from the lows of 16850. Now markets have made a double bottom at 16850 which is a positive sign had market continue to move up from there. After a vicious fall of 1300-1400 points from top, 3-4 strong trading sessions were expected of markets, instead Nifty succumbed on 2nd day of pullback and its failure to hold on to its intraday gain today suggests weakness is still there and same also indicates that probably one more leg of selling is still pending.

We consider levels of 17450 as the 'breakdown' level of this fall, selling had intensified & turned ugly once this level broke early this week. It was important that Nifty had moved back above this level to regain some of the lost ground. However todays fall (even though markets just closed flat) from just below 17400 levels indicates that 17400-450 is now turning into a significant resistance and unless Nifty climbes back above it, theres is risk of markets moving back below 17K levels.

Another thing worth noticing is how markets expired yesterday. Some pull back from 17850 levels came at just the right time as if to give the incentive to buyers to roll over/ carry forward their position to next month series. Now there is a growing consensus in the markets that there exists strong support in the 16800-17000 zone which worries me a bit. Any support or resistance level which is known to everyone hardly ever holds.

In summary, looking at the way market has traded in the last 2 days, theres a probability emerging that another round of selling is possible from current levels which could take markets below recent lows (16800 levels). Hence caution is still warranted and bottom fishing should be avoided for time being let market build/show some strength ( move above 17450-500) before concluding that worst is over. 

Happy Trading!

Nifty Tomorrow: Prediction, outlook and Nifty Trend for 27th Jan 2022

Medium Term Trend:👈👉 (Sideways)

Nifty @ 17275- Crashed 1300+ points in 6 days.

In last update, we had shared that we saw two possibilities emerging from here ' A- market makes a V shape recovery and shoots above 18500 levels or B- mkt consolidate between 17400-18500 levels for few more weeks' We had also mentioned that the other scenario where market fall below 17K level is our least preferred scenario and in case it happens we will relook at our options.

As it played out, our analysis was proved wrong & Nifty weakened below 17400 levels yesterday, tested 17K levels and today it even broke below 17K levels (though temporarily) before staging some sort of recovery and closing around 17300 levels. But now since market has convincingly broken below 17400 levels, its important that we re-analyse the whole scenario in the new light.

Fall we have seen in last few trading sessions has been pretty sharp with VIX rising sharply. Domestic (budget/elections), Global (Fed meet) & Geopolitical (Ukraine/Russia) events have taken center stage and playing out with the markets & traders sentiment. However inspite of such a brutal fall, we still would like to stick with our second option (i.e, option B- range bound trade) though with a revised range.

For now it appears market wants to trade in a sideways range (between 16500-18500 on a larger scale and 17000-18000 on a slightly smaller scale). We had previously noted ( ref  Nifty 20th Dec Update) that fall from 18500 to 16500 was extensive and broad based & its not uncommon to see market going in for an extended period of consolidation post such moves. So we wont be surprised to see market moving in this range of 1000-1500 point for few more weeks. 

Moving forward, it is likely that markets more or less has priced in these events, and unless global situation deteriorates severely, we do not see sustainable fall below 16700 levels. There could be flash trades (like today) but eventually market should be able to move from there. Moving above key resistance of 18000-18500 however will take some doing and wont be easy.

In Summary, inspite of the carnage we have seen in last 6 days, we maintain our 'Neutral' stance & not turning bearish yet. From trading perspective it makes sense to sit out for some time (or trade with light quantities). Scenario is likely to become clearer in coming trading sessions.

 Happy Trading!