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.
After reading Nifty chart closely today morning, i just came across a probable double bottom pattern which has been confirmed. Though i missed it while breakout but we had already recommended longs on other factors. You might be guessing that now whats the use of it?? Of-course we can be cautious near its target of 7620. Similar resistance levels are obtained from Fibonacci and 7600 Call Option. Even a Downside sloping trend line is approaching around the same level. So now we have almost 5 resistance near 7620-7650 making a strong level for a stop loss on shorts. I would be intact with my short call on Nifty as given in my post “Nifty in reserve” on 3rd march but on stop loss side, i would wait for two closing above 7620 before covering my short trading views and recommend you for the same. Many global events to unfold by monday so my eyes on global markets rather than domestic news!!!
Nifty continued with its wired trend of making Higher high and lower low for the second consecutive day but today its not the Doji but a strong positive candle. Technically, it may be called “Bullish Engulfing” but its not clearly near a new low so we can consider this just a continuation pattern that too a bit dicey one. From the derivative markets, we have seen addition in Open interest both on 7600 CE and 7400 PE equally today making situation more confusing. On daily charts indicators are pretty- flat while of-course on weekly charts as i have suggested medium-term outlook is positive. But on minor wave correction is expected soon on the index. So i remain intact with my Sell on Rise strategy for short term traders as i suggested on Nifty to reverse!
Nifty has given a close with a perfect Doji on Daily charts, signing a Pause to the previous trend or a break before going ahead. In simpler terms, Doji represents confused state of mind of traders. To add more confusion, today’s Doji pinched a New high as well as new low compared to previous closing giving No clue to technical analyst to decide further route on candle stick patterns. Taking some clues from Derivatives which suggest resistance building strong at 7600 and me too suggested you guys to short Nifty with the same stop loss in my post “Nifty in Reserve” on 3rd March. Indicators have turned flat on daily charts and Nifty bank has given a weak close today so i would suggest to hold on my short call on Index with the same stop loss of 7600. Tomorrow opening shall be crucial…!!!
Nifty has given a strong weekly move of almost 650 points from the day of the budget to todays opening price which marked high at 7505. Again PSU banks rallied and out-performed but at last it seemed rally was a bit exhausted. After a non-stop rally of 600 points in one week, am bit looking for Shorting opportunities. If you look at Derivative date, 7500-7600-7700 calls saw a huge writing through the day. While a Hanging man on Daily charts displays that traders are indecisive of the move from such a crucial resistance. So sentiments are strong for the rally but options are suggesting a pause. Now lets see who wins the match. If we see a negative opening on Tuesday and couldnt sustain above today’s high then surely we are receiving my target on downside of 7260 mentioned in Nifty Reserve yesterday. Overall i would sell on rise for rest of the expiry because there aint any good reason for non-stop rally to 7700.
Today Nifty closed above my expected resistance level of 7447 which was my 50 day average level and recommended target yesterday at “Double Dhamaka”. Looking at todays move on Index, it seems Nifty is going to be unstoppable for a day or two. Technically, Nifty seems to be approaching reserve level for this rally. We must rest for a pit stop to move further smoothly without any steep correction. Now all technical levels for resistance are near to 7700 but i feel bulls would be exhausted before we reach there. Now Looking at options data i feel 7500 is strong resistance and one must surely book profits on long tomorrow morning. I feel as a trader one must take a bearish view for at-least 2-3 sessions . So as technical and options are coinciding for the resistance range 7450-7500, i would stay bearish but purely for trading perspective.
Sell 7500 CE and Buy 7300 PE
Net Payin: -78+104= +24/lot
Target: 7260 Stop loss: 7600