Nifty has witnessed almost 900 points rally from the low this expiry to the high of today. Rally was uninterrupted by bears at any day but it seems game was all over for bulls today. 7720 was my strong resistance on closing basis which has been intact even today but we also have witnessed a strong red candle almost engulfing last entire week. Though we need confirmation which can be obtained only on Fridays close but looking at other factors we can be rest assured that volatility would be at the peak this week. Technically speaking, we had a gap at 7721 which is now filled and acting as strong resistance. Secondly Fibonacci level was at 7700 and Finally 7700-7600-7500 Puts have witnessed unwinding while 7700-7600 Calls have witnessed write-off. Combining all the factors, it surely seems that we are going to see some extreme volatile profit booking in upcoming days. So now may be traders could take a short view for the April expiry with targets of 7480/ 7350 with a stop loss of 7750.
Nifty has been in pretty positive mood these days compared to global peers where we are witnessing profit booking. Nifty opened up almost flat and remained in the tight range with a derivative resistance of 7700 through the first half of the day but than we did witness some fierce intraday sell-off which did not last for long. We finally recovered all the lost ground and filled up the gap exactly at 7721. Nifty has given a spinning top creating more confusion ahead. Though derivatives are shifting resistances from 7700 to 7800 but technical are suggesting that Nifty is in Resistance web. So yet no clear trend for the medium term so am just waiting for some one perfect call. Stock specific trading should continue.
Nifty has given outstanding performance for this series which was not really expected from the bulls. Though its very difficult to pick up the lowest and highest price but still we did get enough part of the rally in our pockets. As i had mentioned in earlier post that Nifty has entered resistance cluster so not getting any confidence trade on either side. So its better to talk about resistance levels and support levels on the daily charts. Today for the first time we closed above 100 day SMA at 7615 after 28th October 2015. Now on the upside we face a small intraday resistance of a gap around 7721 while above that we have resistance of downward sloping resistance line from life high which is around 7850 and 200 day SMA which is at 7905. On the wave theory we have 7700 and 7900 as resistance levels so we should keep that levels in mind while taking positions. Though i would suggest to go stock specific trade next week rather than index.
Nifty finally breaks the trap line at 7580 and we closed above 7600 above first time in last two months. My stop loss 7600 on closing basis have been triggered today. Technically, still the road is not clear to take a fresh longs as many resistance points are hitching around same levels. While todays high had triggered Double bottom target which was 7615 now the next resistance is Broadening formation trend line around 7660. Coincidentally 7615 is also a 100 EMA which has been acting as strong resistance since we traded below the same in August downfall last year. So now the range of 7600-7700 because wait and watch situation. So currently No fresh positions recommended for new players but if you are long for short term than time to start booking profits for march series while if short players havent squared off than now they can take lil risk till 7700 which is strong resistance from options data. So now i would prefer stock specific trading till end of Expiry as we have many holidays too.
Nifty traders are victim of a trap line near 7580, which has been engulfing bulls since January’16. Today to we made high exactly at around 7580 which is a coinciding resistance of many studies. On the other side even the 7600CE has been witnessing continuous call writing since the start of expiry. Currently indicators are flat on daily charts since we are trending range bound. Even a Broadening formation has can bee seen which has a symbol of perfect volatility. Nothing can be predicted from the candlesticks as of now but may be tomorrow we can get something interesting on weekly charts after a close. So i am curious for tomorrow close, though my sell call on Nifty is intact since March 3rd Post.
After a weeks Non-decisiveness on Nifty charts, today we have finally got a bearish reversal pattern. Though for a confirmation we need to get one more close below the same candle. Nifty was unable to trade above 7560 since a week and today Options data win which were continuously suggesting sell on rise. Though Reliance and SBIN which remained strong in the positive zone holding Index to some extent. Indicators finally on Daily charts have biased towards bears on the ground. But the consolidation support is at 7440 and we need to break that and close convincingly below the same. On the Downside now we have support of 50 DMA which is at 7370 and if we break that 7265. All eyes on FED meet tonight. My view on sell on rise still intact.
Nifty had opened up near the resistance level as i mentioned in the morning near 7560 and we did trade above the same for few mins but we could not sustain above the same for much time. Markets had stuck in the strict range after opening hours and we ended with a Dragon fly Doji on daily charts which is sign of Bearish mood ahead. Though for confirmation we need a day more tomorrow. CPI numbers are just announced and they have been improving which is a good for a bit. Indicators are flat on daily charts so now all eyes on candle tomorrow. If we get a lower low tomorrow than for sure my target mentioned on Nifty in Reserve is coming. So fingers crossed for tomorrow. 7560 remains crucial resistance for tomorrow
May be traders and analyst are busy with Daily charts of Nifty, but i guess many of them have missed last weeks closing on weekly chart. As you all can notice on the chart, last weeks candle has been a Spinning top or may be even doji resisting near to 7560 which is a crossing resistance level of a recent tops downward sloping line and last two years turning point horizontal level. Lets talk about 7560 as the trigger level. Take the extreme left circle which was June’14-Aug’14 period when Nifty has taken rolled over 7560 many times and then finally triggered a spree to buy after NDA taking control at the center. After almost 1.5 years in Aug’15 we traded below 7560 for the first time after Aug’14 but took closing support and closed above the same which is market in the Second box from the left. After witnessing pull back for 2 months, we tested again 7560 in Nov’15-Dec’15 as marked in Pink box. But this time support couldnt sustain much and in Jan’16 we triggered sell when we traded below 7560 for the first time in almost 2 years and we are closing below the same level on weekly basis since then. Since last 2 months we have tried for 4 times to close above the same on weekly charts but we havent been successful. This week is crucial!!! We need to close above 7560 and if we do than only i would trigger strong buy. So keep aside all complicated indicators on charts, simply wait for Weekly closing. Though my Short call initiated on 3rd march on “Nifty in reserve” is intact.
Today was the most boring day for positional traders as we end up nowhere by the end of the day. We can call it a trap day for intraday traders as both bulls and bears were trapped at least once during the session. Traders are in confused state of mind for near term while expiry players are building base on 7200 PUTS as support while resistances are 7500 and 7700 on the call side. Technically markets are overdue for correction but before that we may see some bounce back but than we are expecting profit booking before 31st March. We can expect some high volatility ahead in the month. Though i would sell on rise as i am expecting a downside any time this month after a strong recovery from budget lows. Today’s candle has no clue which side it stands for, so monday opening shall be crucial after FED meet tonight. So finger-crossed till monday.
I may be sounding biased since last few days but i am still sticking with Sell on Rise strategy on Nifty as i have recommended on the post “Nifty in Reserve” Today to fuel more on my view, we have notice a possible “Dark Cloud Cover” candle stick pattern which is a bearish reversal pattern. Conditions of pattern are 1. First candle should be a long green candle. (Yesterdays open: 7436 and close 7531 which is equal to 95 points) 2. Second candle should open above the previous green candle ( Todays open was at 7545 which is above yesterdays high of 7539). 3. Red candle should pierce Green candle and atleast close at 50% of the Green candles body. (Yesterday’s body range is 94 points and 50% is 47, so the close should be around 7485). So as you all can note that almost all the conditions of Dark cloud cover has been full-filled if we ignore 1 point above closing than required on index. As exception of pattern suggest that if at all red candle close above 50% body still it can be considered a reversal pattern. Secondly, looking back at other resistance marks then for the third day today we have resisted near 7544 which is 61.8% fibonacci pull back level of last fall down. Thirdly, We have seen strong writing again on 7500CE, 7600 CE and 7700CE while on the PUT side we have seen much of unwinding suggesting a fear of fall in markets. So my stop loss strategy is intact as i posted in the morning in “Nifty approaching resistance cluster” . Fingers crossed for ECB meeting tonight and i wish it could give me some sell-off sign.