Category Archives: Nifty

Nifty showing fear for first time in 14 months!

Nifty had been in super trend since the month of Demonetization which gave us a rally from 7900 to almost 11200 in 14 months. Generally market is said to be significantly corrected if we have a breakdown of almost 10% from the recent highs and which we never got in this 14 months rally. But now, last week sell-off has got some fear amongst traders and that nervousness can also be seen on weekly charts of Nifty

 

Attached chart is of Nifty and the periodicity selected was Weekly for my study. During my quick go-through it came into my notice that Nifty is near to 13 Weeks Average support which hasnt breached on Weekly closing basis since last 14 months. Currently that support is at 10550 mark and we almost kicked it off today with the low at 10586 at spot level.

So what Next?

Surely we are trading near to support crucial level but it isnt sure that we breaking down from this levels. On positive side, Nifty has given a minor 4 th Wave correction which might have ended at  todays low and we may see some bounce back to 10900-11000 levels before confirming any medium term reversal. Strongly resisting this rally is the bearish engulfing pattern on weekly charts at recent highs making it more difficult for bulls to take fresh longs. I am sure many mid-cap stocks are looking at attractive valuations which tempt you to buy stocks for short term but crucial remember 10550 on this weeks closing. To support on the short term trades, we even have strong PUTS writing at 10500 until today which would be help for derivative traders.

Conclusion :

Short term trade can be of a pull back on Nifty since we had got a steep fall in recent past. So short term traders can go long on Nifty with tgts of 10790/10840/10960 and stop loss 10520 

Medium term traders could wait for a confirmation of either breaking below 10550 or above 10900 for trend confirmation.

Have a happy trading week guys!

10000 is the new 9000 for 2018?

Markets has clicked a New high yesterday bringing some cheers among-st traders but most importantly it has shown some new sing of rally for Technical Analysts. As we all could witness, Nifty has been in the range of 9500-10000 post GST but since late October the range had rose to 10000-10450 which was finally breached yesterday

During these two quarters of rally, one thing has been clear that 10000 mark was acting as a pivot point around which markets were resisting and later taking support. After yesterdays a pinch of breakout from the box of consolidation, we can now lookout for 11200 mark minimum on upside while other 3 probable targets for 2018 would be 11600/12300/12700. 

That was about upside but would could be the bottom ??????

10000 could be the new 9000 for 2018. 9000 mark was considered to be strong support for 2017 which was neckline breakout of Inverted H&S and the same could be the case with 10000 mark for coming months. Though some might not consider breakout to be a strong one but for me its a confirmation for a new bull run.  Fundamentally too we have seen many companies posting better than expected results which could attract some institutional buying at start of 2018. May be we have expiry next week so we might get some volatility but now 10000 is strong psychology support while 50 day SMA at 10117 could be the stop loss for traders.

So what would be the Strategy now ?

For Investors: Start accumulating Front line stocks on each dip in coming quarter and then hold for 2 years

For Short term traders: Buy Nifty on each dip with tgt of 10680/11200 ….On the downside we have supports of 10290/10117/10000

 

Doji Family is ruling party this week!

Nifty had been in strict profit booking mood and bulls were trying to find out a way to get out of the trap and then Moody’s Re-rating on India came as a surprise on the street! Markets took a U-Turn on such news and we saw a initiation to a new short term rally. 10345 which was a strong resistance level is now acting as a “battle field” for Bulls and bears since last 4 sessions.

Interestingly we have got “4 Consecutive Doji’s” on Nifty daily chart which is signifying a a perfect Demand And Supply scenario. Tomorrow could be an interesting day which could bring out one winner for short term. Applying Elliot Wave on the chart, it seems we are into Wave 5 of the Minor trend which could end around 10600 which was also target activated on Inverted H&S breakout at 9000 making target more feasible. For near term support, 10150 could act as a stop loss for all fresh longs. Even taking support of Derivative setup as we get near to Expiry, 10300 has a strong writing on the PUT side which means now that level is difficult  to close below in next week.

So now as Doji’s are crowded on the chart, tomorrow could be decider day or to say for me it will be a confirmation day for a long calls. Be stock specific on the trades and not on the index. Keep a trailing SL of 10150 for all existing longs and for fresh longs keep 10270 with tgts of 10480/10600 in coming weeks.

Hence confirmed!

Nifty had been volatile in the strict range since few months between 9700-10150 but in such course it was giving a perfect corrective Wave which was proved this week. In my last post we did study two cases where we expected either sharp downside or rally, and now our fortune is decided.

So now as you can notice in the chart, Nifty had two possibilities of going to either 9400 or 10700 which all depended on whether it is resisting near to 10060 or not! Yesterdays close above 10060 has given a fresh breakout on weekly charts and now we can be rest assured that we are positional inching to new limits for the skyline. Though the rally wont be easily as it was in the start of the year but with some hiccups on the way.

Technically speaking, lastly marked 9700 was an end to a corrective pattern and new Motive Wave has been initiated since then. So now technical support range for long trade would be in the range of 9700-9800 where 9860 could be a stop loss for all long trades as of now. Indicators are though overbought in weekly charts but have got enough correction in recent past to make a new strong move. Wave count makes a recent small tgt of 10700 with sl at 9860 on Nifty weekly chart. Stop loss at 9860 gets more relevance as its even 20 Weekly SMA which has acted as significant support since the start of this calendar year rally.

Strategy for Traders: Buy Nifty on each dip with tgts of 10700 and Stop loss 9860

Strategy for Investors: Park your liquidity in Pharma stocks and Pvt sector stocks for long term investment in next 2 weeks and wait for fruit to ripe in two years. For stock recommendation look out for our app!

 

GST Simplified to fuel next rally or its a Start of Wave C to 9400?

Nifty has completed short covering which i mentioned in my last post and targets of 9980 were achieved on Friday. But now what next?

Technically speaking we should now trade after getting closer to 10050-10060…But can GST Simplified announcement fuel the rally ??…Lets look at the chart

May be you might be confused looking at the charts, but let me explain you in simple words. When we last crossed 9000 in March, we gave a breakout to Inverse H&S pattern which gave a target of 10600-10800 for a long term bet which is yet active which suggest that we are surely in a long term bull run and we should get there once before crossing down 9000 anytime in future. Now when we consider Wave Theory to predict further trend we are getting two probabilities …First is that a dip to 9700 was a Corrective WAVE A of larger trend , which means recent short covering is WAVE B which can resist in the range of 9980-10060 and resume slide down to 9400. Second is that a dip to 9700 was the end of Corrective Wave 4 of a motive wave which means we are into Wave 5 of the larger trend which could get upto 10700 which is coinciding near to Inverted H&S. But remember BOTH POSSIBILITIES HAVE EQUAL CHANCES!

Now looking at the Derivative open interest , currently we are having a resistance at 10000 which is making us little bit biased on the short selling in next week but for the bulls we got a GST Simplified Announcement post market hours on Friday which could break that resistance on Monday opening.  Now Talking about Moving averages , we have closed above 20 DSMA 9965 which was acting as a strong resistance on daily chart and on weekly chart we have taken strong support on 20 weeks Average which is acting as support since start of the year.

So to recommend a strategy to my readers, i would suggest going stock specific longs on monday in sectors such as PSU Banks and Pharma which are looking to outperform on charts in coming weeks. Also Earning season kick starts next week so that could be in focus. On the otherside for index trading, i would recommend not to trade this 100 points  (9980-10080) as it could be quite volatile. To get a confirmed trade, we need to close above 10060 for longs and close below 9910 before crossing 10000 next week for shorts. So its better to avoid index trading and rather stick to stock specific trading.

Happy Weekend Guys and will keep you posted as soon as we get some clear trade on Index!

Time to liquidate Short term trading positions on Index!

Nifty has been range bound in recent sessions after it gives a first tick of movement. But in such a course it has given a perfect move on 5 Wave theory! Nifty is currently into a 3rd Wave of a minor trend and its expected to end this Wave within next 2 sessions.

Technically, Nifty is about to resist for a small term near to 10200-10230 mark which is a probable tgt as per Elliot wave count. This view is supported by Derivative data which has highest open interest at 10200 CE which is suggesting Writers resistance level. Indicators too are overbought zone on daily charts which supports a near term correction. We dont have any reason on fundamental or economic side, therefore this correction would be mixed bag and not sector specific. Generally banking stocks do fall with heavy momentum but PSU Banks which havent moved equally are expect to counter fight profit booking in High beta banking stocks.  On other hand, Pharma counters, which are generally defensive bet against the fall have already started showing signs of improvement. Even the currency market has consolidated on lower levels for much of the time and now a counter rally in Dollar is expected. Accumulating, views from different segment of markets, we can be more sure on profit booking in near future.

Our view:  Liquidate all Long position on Nifty in next two sessions and risk takers can go short on index with Stop loss of 10280 where in tgts on downside are 9950. As its just a profit booking move, we dont recommend to liquidate long term investment. We will update you soon if we get any major melt down or breakout. Thanks and Trade safe!

Bottom is yet away!

Hello Readers! Finally after a long break am back to my blog. Nifty has crossed 10000 mark in pretty short time and so the correction which has kicked off is gonna be more sharp and deep from current close of 9837. Lets have a look at the Nifty daily chart!

So if we mark our recent rally to 10137 it was into a perfect channel which was breached down simultaneously with a bearish H&S pattern giving a tgt of 9839 which was achieved in No time. But  does that mean correction is over??..No…. H&S tgt is not a sign of end ….So now when we turn on it other parameters, we are getting some sign of more bearishness in markets. If you look at 20 day SMA (Orange line), was acting as strong support until the day we breached neckline of H&S. Now 20 day SMA is acting as strong resistance which is around 9950. We did resisted last week exactly at the mark making average a valid resisted.

What’s next stop?… Calculating Waves, i feel we are in the last thrust of corrective wave, Wave C. Though it would be a complex structure formation but we might be heading to 9500 (+/-50) in coming weeks.  Indicators on Daily time frame are approaching oversold zone so be u might get some lumps of bulls on the way down but we shouldnt get fascinated until we are completely over 10000 mark again. So as a trader  i would square off all longs on index on any rise near to 9900 mark this week and try my hand on selling with sl of 10000 for next series with tgt at 9500.

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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After daily chart, Weekly follows for bearish reversal on Nifty

Nifty had been quite volatile in last few sessions between 9400-9500 but during this course, as as expected in my last post: Is Doji Indicating a false breakout? , Doji did confirm bearish reversal pattern “Evening Star”  on daily chart. What did confirm Doji? ….Red candle on 18th May which closed 50% below green candle just prior to Doji and another red candle on 19th May which made lower low and lower close than the pattern as whole

Nifty Daily Chart

So as we can notice in daily chart above, Nifty has clearly giving Evening star bearish reversal and its approaching crucial level of 9370 which is 20 day SMA (Support intact since dec) and also trend line support stretched from December low. So next week being expiry, do watch out for 9360-9380 as strong level to go fresh short.

But now lets look at weekly chart….

Weekly Chart

Interestingly, On weekly chart  we have got a Grave Stone Doji right on the top which means we can even get another evening star pattern. If we close below 9355 in next week than we can expect 8980-9080 in June which would be just a 38.5% correction to previous rally.  On the other side Good results from PSU Bank and GST is would try to resist fall but we need to wait and watch whats unfold next week.

Strategy for Traders: Short 9500 CE May and Buy 9300 PE June tgt: 9210 sl :9580 on closing basis

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