Category Archives: Nifty

Is Doji Indicating a false breakout?

Nifty managed to close above 9500 for the second day which made some traders over confidence for some more long trades…but STAY CAUTIOUS! In my last post (Range volatility expected but find sector specific moves) i mentioned to WRITE  9200 PE and 9500 CE , surely you might be in loss for M2M in CE writing but wait.  Open interest data is still suggesting a strong resistance at 9500.

To support our profit booking view for near term on Nifty, today on daily chart we have got a Doji candle which is a sign of pause to current trend. It has got more significance today as it is at the high of current trend and also indicators are in overbought position. So what could confirm its role of reversal???…”Candle Tomorrow” ! Watch out for Opening of Nifty, if its below  9517 and we dont pinch a new high, there are 70% chances that we could get a reversal sign on close tomorrow.  May be i would consider last two sessions close as a false breakout for short term traders.

On other side if we look at global markets, they are already showing signs of weakness since last two sessions and also bullion markets are in strong short covering move which is a sign of Equity market reversal. So strategy would remain the same on Markets as last post:  writing calls on Nifty and going short on Nifty Bank! 

Happy summer trading with strict stoploss!

Range volatility expected but find sector specific moves!

After a long time got something to write for Nifty as until last week we were trading strictly in the range of 9000-9360! Finally, this week we got new high 9450 and managed to get life high weekly close. Banking sector was leading markets with PSU Banks outperforming as i had predicted on 25th April in my post “Still some more time to have trust in PSU Banks” ! But now i feel for short term things are turning around.

After a massive rally in Banking stocks , now we have started getting some negative news from banking companies such yesbank’s AGM report, weak mid-cap numbers and many more.

As we can notice in daily charts of Nifty bank above, index has weakening momentum. RSI has already given bearish crossover on its average which is the first sign of weakness. Secondly, two consecutive bearish candle’s on the top are also support profit booking view in coming months. The Blue Box marked is the area of trading until May expiry which suggest that now Nifty Bank could be volatile in that range of 22000-23000. So avoid any long trades as of now because we are near to the higher range. Can look out for stock specific short term selling in Banking Counters.

Where we can expect strong profit booking in Nifty bank with almost 1000 points, on other side, Nifty is expected to be volatile with profit booking on Nifty bank to be balance by IT and to some extent Pharma sector. 

As we could notice in the nifty Daily chart above, we broke out of consolidation range of 9000-9380 last week and now we have widening range of Nifty to 9250-9500 for the rest of the series. One steep fall to 9280 could be expected but we should hold around 9250 as still weekly momentum is expected to be strong. 9250-9280 has lots of support factor like 20 days SMA, trend line support stretched from 9th Nov low and Open interest support. So as a trader i would short Nifty for few session with sl at 9500 while as a investor would wait for 9250 to park my liquidity.

Then what could counter balance Index and Banking fall?…….. IT Sector….

IT sector as noticed in the above weekly graph was in a strong down trend since start of the 2015, as in the white channel. But now new weekly upward channel (Blue channel) has taken a lead which would mean now IT stocks could outperform. Already in last week we some signs from TECHM IT leading markets ahead. So be Long as a trader in next week

Which could be other sector to watch out? …Pharma Sector.

Pharma sector has been most under-performing after IT sector since 2015 where our pharma companies have been under USFDA scanner. But now things are looking to be cooling down and worst seems to be have discounted in pharma sector. NSE Pharma index is at 9 years support which is 200 Weekly average as represented by yellow line in graph above. So still strong momentum hasnt build up which could confirm long positions but we can start accumulating pharma stock as we could expect sharp surge anytime in next 3 months. Start scanning pharma counters.

So strategy now for public participants:

Nifty Index: Write 9200 PE and 9500 CE 

Nifty Bank: Write 23000 CE and Buy 22500 PE with stop loss at 23200

IT Sector: Be long on INFY (tgt 1000) and TECHM (tgt 460)

Pharma sector: Accumulate Sun Pharma and Mid cap pharma stocks.

Read disclaimer on

Was it a Wave 4th truncation today at 9120?

Nifty has been in consolidation since UP election results on 14th March which is almost a month now. We have been consolidating strictly between 9000-9250 but with strong stock specific movement. On the other side Nifty Bank has been out performing by holding 21500 level since quite a long time.

Looking at Nifty daily chart , as attached, today we have closed with almost a Doji which signals pause to current trend which was a down trend. Now if at all we open a point positive and trade above todays high than we may get somewhat like a morning star pattern which is a positive reversal pattern. Though on negative side we have more factors such as todays close below 20 day average first time after 6th jan and overbought indicators. But what makes me strong for a short rally in near future is strong breakout of market leader Reliance and strong option support at 9000 by PUT writers.  Also if we consider Wave count theory, then probably we have given a close to wave 4th today by completing Wave C of A-B-C zigzag formation in 4th Wave. So as of now there are equal forces of Bulls and Bears on Daily chart and only tomorrow move could decide market sentiments ahead. But would still recommend to remain long ton stock specific .

Strategy for traders: ” Avoid Nifty trade specifically, but  buy Reliance 1400 CE and buy 9000 PE Nifty.” …tgt 1480 on reliance…! 

Friday was just a speculator profit booking

Nifty has been on a dream run since start of 2017 but Friday’s last 30 mins shook long term traders and many of them squared-off longs in fear .After studying fall on chart , it seems it  was just a speculator’s profit booking as still we havent got any clear pattern of strong reversal on charts.

So as we all could notice on the chart, Nifty is taking strong support on a trend line which is intact since Jan and also travelling to 20 day average (Orange line) since mid-feb. Currently, both 20 SMA and Support line, are at 9120 making it a crucial support for next week. Looking at the option data we are building strong supports from PUTS writing at 9100 and 9000 so any dip in the market is a buy for a positional traders. Now if we apply EW Theory then we will now have a 5th Wave up with minimum tgt of 9350. So the strategy remains buy on dips with SL of 9000 for positional traders.

Better late than Never!

Good evening Readers. Last 3 weeks have been pretty much of a rally and it was difficult to say we wont get any correction until we opened gap up after UP results on  this Monday. Many of my blog followers would have felt they lost money as i was bearish on Nifty since my last post on 27th Feb? ….BUT THATS NOT TRUE… Why? …My strategy was to Short Nifty (8890) 8890 and Long reliance (1180). So strategy Finally closed today with Reliance hitting my than tgt 1325 and Nifty triggering stop loss at 9150. 

Profit on My strategy

Buy                    Sell                Margin                 P/L (for one Lot)

Nifty                    (SL) 9150                8890                55000                     -19500

Reliance                   1180               1325(tgt)            85000                    + 72500

So Net payout: Rs. 53,000 

So above strategy was a perfect example how a spread strategy could be the best thing to trade to avoid any side trend

Now what next after such a bullish closing?….

We have got the perfect Inverted H&S breakout on Weekly chart with Runaway gap up on Monday on back of UP results.. Though m posting a day early for a confirmation but it seems we will get breakout above neckline at 8980. And interestingly pattern target is coming up to 10600 minimum if we sustain above my stop loss. So now its better late than never. If you guys still feel left out of markets or investment , enter now with part investment and may be some after few months. But you must surely invest stock specific at current levels for long term. Few good stocks to invest are Tata Steel, Reliance and Sun Pharma. Want me to design your long term portfolio than can mail me at

Strategy for traders:

Buy 1 lot of Nifty at CMP tgt 9350 and SL 8980 and buy 1 lot of tata steel with tgt 550 sl 480 and maximum loss: 52750 if you strictly follow my strategy.

Thank you readers for following my blog! Happy trading with strict stop loss.!

Bulls not able to overcome psychological resistance!

Nifty charts have been like a pendulum between red and green candles. But finally we have resisted near to 8980 or to say 9000 level which i had been mentioning in my previous post and it looks like it was the end of 5th Wave of a smaller degree. So next would be correction phase which could be a sharp fall or consolidation phase.  Fundamentally we dont find any trigger in coming weeks but may be politically we have UP election results to decide whether correction is going be a sharp fall or consolidation.


Technically we can decide to support levels which could help us to decide degree of correction, 8780: if current fall takes support at this level, which also has a gap unfilled, than we could consider this phase to be a consolidation but if we fall below this support than it can be more sharp correction towards . 8480 which is another gap unfilled. Taking some snap from indicators, we are in overbought zone on daily charts since January and a correction is surely due this expiry from Option data setup. So now i would short fresh on the index…


Strategy for Traders: Short Nifty with tgt of 8780,8560,8480 while Stop loss could be 9150 and would hedge buy going long on reliance with tgt of 1325 sl: 1150

Strategy for Investors: Arrange for some liquid funds as in next 20 sessions its gonna be opportunity to accumulate stocks at 8600 and than 8450 levels on Nifty.


Market losing momentum

New year 2017 has been good for traders until now and even on monthly chart gave strong reversal for investors. But the rally couldnt be without any hiccups and we are going to have one. 8530-8980 was my range mentioned in last post , but couldnt touch the high of the range but can get closer to downside range.


As we could notice in the chart, last 7 sessions have been sign of losing momentum. We got 7 consecutive red candles which  means markets closed below the level where it open for the day which clearly signs that traders are selling on any positive opening fearing markets to fall. This fear finally turned to reality today as Nifty closed below 4 day SMA and 9 day SMA after 36 straight sessions of positive close over the same. Even indicators such as RSI and MACD has given negative crossover to confirm bearish signs from price and MA crossover.

So now to sum up, still the charts for long term are positive but we may witness some profit booking before expiry which may take support at 8652/8600/8580.

Strategy for Traders: Square-off Longs and short with stop loss of 8860

Strategy for Investors: Buy on each dip with stop loss of 8410 for investors.


Achhe Din aa Gaye!

“Achhe Din aayenge” had been most chanted  slogan around India Since 2013 but now actually “Achhe Din aa Gaye” in last two months. Though Demonetization has been criticized by most the population of India but thats because short term pain they went through during Nov-Dec. But as saying goes “सब्र का फल मीठा होता है” , we as a responsible citizen of India should wait for Demonetization’s fruitful results in long term. Few of the fruits have started ripening such as economy outperforming other developed economy, decreasing Indian CAD, rising digital transactions, decreasing bank rates, rising tax payers, rising tax slabs, increased government spending on infrastructure, liberalized FII norms, passing on benefits to farmers and counting…So actually we are moving towards a phase where our each day would be labelled “Achha Din” and credit will go to citizens of India!

So coming back to markets and particularly to Nifty, we are sensing a strong pattern on Monthly time frame…..


As you all could notice in the chart above, circled candles symbolize a Morning Star pattern which is bearish reversal and being on monthly chart it has strong significance. But investor to get confirmation, we need to hold 7900 level for next two series. Looking at other indicators on Monthly chart, we can be sure of buying on each dip for next few month holding

Strategy for investors: Buy on each dip with stop loss of 8200! 

Coming to short term traders, i had a target of 8720 which was just achieved before closing on Budget day.


If you look at daily chart above, we are in overbought zone and nearing to resistance line of the channel but that doesnt mean we will resist for cent %. If the momentum is still strong on stocks, we may still get 300 points rally this series as indicated by option data. So for a fresh position its risky but still may go with a a hedged spread above 8725 tomorrow.

Strategy for Traders: Hold existing longs with trailing sl of 8530 with upside tgt at 8980 and for fresh buyers go long on PSU Banks (Preferably SBIN tgt 290, BoB tgt188) with a hedging of 8500 PE. 

See you guys until we kick out 8980 or slip down 8530..!

Traders Pocket may get more Fatty!

Traders got their pockets Fattier this expiry after a long time but this MAY NOT be end. Budget to decided whether “Traders pocket would get more Fatty”! .  I did expect Nifty to touch this high two weeks back at my post: “Bottom’s up for Short term trader” where tgts were 8445/8563/8712 and we are just left with the last one. Such a fast rally now could even activate more high levels if the budget comes in favor of common men.


Now Lets talk Technically! As had been mentioning since last few post on Nifty, 8720 could be crucial level on weekly basis. That should be stop loss for short term traders who might have carried forward shorts. But for long traders party would continue above 8720. Indicators have totally turned positive but as per Elliot wave 8720 could still be a small resistance so that level should be played with caution! As we i have indicated with Green Lines, Nifty has given a probable Inverted H&S pattern and its still intact as stop loss which is usually at right shoulder low is still intact which is at 7800. Surprisingly target is at 9800 which is too juicy to trade with a small stop loss from current level but remember 8720 is cautious level. Though am not confident at fundamental side but technically we have few chances for a rally. We will get more confident if we close above 8720 but remember 100 day SMA at 8445 should act as a stop loss for all long trades.

Strategy for Traders: Stay with longs with final target at  8720 with trailing SL of 8445

Strategy for Investors: Hold 8500 PE as recommended before until next post!



“Bottom’s up” for Short term trader

Before you get my title wrongly, what i meant was that Nifty has given a Double Bottom confirmation for Short term trader which has taken traders on a high in quick time. In my previous post my target for traders was 8,250 which was achieved 2 days back but i was waiting for Double Bottom breakout confirmation whose neckline was at 200 day SMA, around 8287, making breakout more valid.


Looking at the chart am sure many technical analyst would find current set-up juicy to trade for longs as firstly, we have closed above 200 day SMA. Secondly, we have got Double Bottom breakout, Thirdly, indicators are Juicy for positive movement and recent volumes too have been above 5 day average. BUT…….we as a medium term outlook we are still into corrective wave and this is just a Pull back rally and we have small resistance of 100 day SMA at 8445. Infact extent of pull back would decide the strength of correct wave. If this rally ends some where in the box marked which is around 8,563-8712 then corrective Wave could be a Zig zag and we may see new low below 7900 but if we witness this corrective rally to stop anywhere around 8,900 then it could be a Flat which means we wont trade below 7900 atleast for this year. So to sum up in simple words, traders still have some chance to trade longs.

Strategy for market participants:

Traders: Buy Nifty with tgts of 8445/8563/8712 sl: 8220

Portfolio Investors/Medium term traders: Start Buying FEB 8500 PE above 8440 spot level with sl of 8712

Spread Traders: Buy metal stocks such as Tata Steel/VEDL/JSWSteel and Short Nifty!