Monthly Archives: June 2017

Nifty closed below two strong supports!

Nifty Continued with is volatility throughout the week but Evening star pattern on Weekly charts and Bearish Engulfing pattern on daily chart which i mentioned in my last post : “Nifty near to triple Support” are still Valid.  Additionally , Two supports out of three which were crucial for the week has been breached on Friday and markets have closed below the same. The third support has been void as the channel is no more intact on daily chart.

So as marked in the graph Nifty has confirmed weakness by closing below 20 Day SMA and also the closing below the support line which was intact since January this year. Indicators have finally lost buying momentum and are now showing some support for the sellers in near time. On weekly charts too we have seen consecutive two red candles and failure of bulls to false out Evening star patter which was formed during initial weeks of June. So overall trading mood is weakening but stock specific buying momentum should continue on Street.

Weekly Charts

Now lets study weekly charts for the downside possibilities as we had seen a strong rally in recent past. Evening Star pattern is still intact but still we havent got confirmation for the pattern. Whats the confirmation ?…A trade and close below 9550 on Week on Week basis. Looking at last two weeks Red candle it seems we are all set to break that support this week. For the support on the downside, have considered Fibo which gives probable target zone to 9225-9317 while its coinciding with Elliot wave 4th Wave support at 9227!

To sum up , am still bearish on markets for Short term trade and strategy remains the same as i mentioned in my last post….. “strategy for traders would be buying 9500 PE and selling 9700 CE for tgt of 9300!”

Rd disclaimer before investing.

Nifty near to triple Support

Nifty has been pretty range bound since last two expires with slowly pinching new high but since this monday we have got some signs of profit booking. Since my last two posts i was awaiting a small profit booking on the index and finally this week has given some strong signs of downside move.  Though this fall would be considered just a profit booking against the strong long term bull run and so consider this as a opportunity to accumulate quality stocks for long term. Nifty has crucial support levels at 9250-9300 which could be the max as of now in near future. Todays close on Nifty has been at crucial triple support level at 9578! 

So as you all can notice in the graph above, 9578 is support for three factors

  1. Trend line from the low of 2017 year 8148 on 2nd Jan
  2. Downside Channel Support which is drawn from life high at 9709 
  3. 20 day EMA which is also taken as support since start of this calendar year

Supporting above all factors, we also have momentum indicators weakening from Over bought zone with some negative divergence from RSI to price. On daily chart at life high we also have got Bearish Engulfing candlestick pattern which is bullish reversal and its a strongly valid  near to such highs. Even if we looking at Banking sector than that too is weakening which is a strong sign of reversal. From derivative side too we had constantly witness 9700 CE been written by traders which acted as strong resistance. On the downside 9500 is currently suggested as strong support below which gates open straight away for 9250! So strategy for traders would be buying 9500 PE and selling 9700 CE for tgt of 9300!

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