Nifty view for the week starting 29th September

The week gone by:

We were 'Bearish' last week and advised Caution on longs. Nifty broke 8070 - 8000 and almost hit 7840 (low for the week 7841.80). The Index was very volatile on Friday, hitting the low for the week and rose sharply (nearly 150 points) to close at 7968.85.

Our 'Bearish' view on Bank Nifty also proved right as the Index nearly lost 7% (Down 1000 points) but rose along with Nifty on Friday to close 3.5% down.

The week ahead:

The Index has touched some important downward target at 7840 and reversed. Any move above the 'trend deciding level' for next week at 7990 - 8000 and close above 8020 will take the Index to 8140. The Index faces stiff resistance at 8160 - 8180. We don't see a move beyond this level for this truncated week. Outside upside target is at 8308.

The Index has received support consistently near the 50 day moving average through the year. The 50 day simple and exponential moving average are placed between 7880 - 7885. The Index if it breaches this support zone will move down to 7840 - 20. Though our view is slightly bearish, any slide to 7672 will be a bonus for bears.

The Candlestick patterns are forming continuation patterns and the weekly momentum indicators are at the brink to falling into neutral zone from over bought zones.

Index view for September Expiry week

Last week Nifty declined to 7925 before reversing sharply to come within striking distance of the all time high mark of 8180.20. The Index closed at 8121.45 for the week.

Friday's price action looks like a Shooting Star, though its tail is more than normal in length. The weekly Candlestick is a near perfect Hanging Man. Though the market is in a clear uptrend, these Candlestick patterns suggest 'Caution' if not Bearish sentiment.

For the expiry week, if Nifty were scale past 8180, the targets are 8214 - 8237. Move beyond this zone will have 8305 and an outer target of even 8450 (looks unlikely at this stage though).

On the flip side any breach of 8070 will make the Index slide to 8000, 7940 -25 & 7833. The outer downside target can be as low as 7740.

Very small negative divergence is visible in the weekly momentum indicators. Caution advised on Longs.

The Bank Nifty Index Candlestick patterns also suggest a near top. On the daily charts a near perfect Hanging Man after a long white candle is not a good sign for the Bulls. We have a Weekly Doji at the top. Doji's at the top are valued for calling market tops. Also negative divergence in the weekly indicators cannot be ignored even in a clear uptrend. Hence caution is advised on longs.

Index view for the D day

As indicated on Tuesday, 7172.35 is still the top. The Index will be volatile tomorrow being the General Elections 2014 Result day. Let us see the scenarios to get some probable course the Index might take.

Scenario 1: NDA gets a thumping mandate with more than 300 seats.

The Nifty will easily scale 7229 and will attempt 7450 the extended Elliott Wave targets from the 5118 lows.

Scenario 2: NDA gets around 272 - 280 enough to form the Govt.
The Nifty will scale 7229 and might hold at least for the day.

Scenario 3: NDA gets around 220 - 200 and the "Alternative Front" emerges.
This will deflate the ongoing Modi rally and the very mention of "Alternative Front" or "Third Front" with the Bengal 'Tiger' (Mamata) or the Tamil Nadu 'Lady' (Jayalalithaa) being in lead roles, the Index might well hit 10% down circuit. In that case 6500 or 6400 is very much on.

A trading range of nearly 1000 points - 7450 to 6400 for a day. Very exciting and also spine chilling... Welcome "16th May 2014"...    


 

Shooting Star at New Life High for Nifty

Well, sorry I have been inconsistent for long. Hope to change for the better.

Nifty Index hit new Life High at 7172.35 but closed at 7108.75, thereby forming a classical "Shooting Star". The trend is very bullish but the Shooting Star is a warning signal. If the Index gaps down tomorrow and closes below it will be an Evening Star as well.

The Index may have formed a top at least for 2 days. If the actual General Election 2014 results on 16th May goes the exit polls way, the Index may even move higher, else 7172.35 could well be a short term top.

For the week, on the downside 7020 and 6940 are good supports. Any move below 6800 would see a sharp slide towards 6700 and even 6550.  

Nifty view for the last week of Feb 2014

The Nifty Index had a 'Bullish' week with a low of 6038.30 and a high of 6160.35 and closing near the highs at 6155.45.

In our last post, we had mentioned the 'Bullish Harami' on 14th Feb might stall the down move and advised booking part of Shorts and / or tightening Stop on the Shorts. The down move not only stalled but we had a small reversal of sorts. Having said that, the prediction of the next move is very tough.

If the Bullish momentum of the last week is sustained the Nifty has 6265 and 6355 as targets. But Nifty is running into resistances at 6158 - 6161, 6189-6195 and 6200. If the slow reversal since the low of 5933.30 (4th Feb) till 6160.35 can be considered as retracement of the down move from 6355 (and 6415 too) and if the Index reverses below from here it can decline to 6050, 5950 - 5933.

Nifty view for 17 - 21 Feb 2014 weeek

The Nifty Index stayed within our first Resistance 6120 (week high 6106.60) and first Support 5970 (week low 5984.60) indicated on 9th Feb - meaning Nifty was range bound for the week.

Friday's price action ensured a 'Bullish Harami' candlestick on the daily chart. A Bullish Harami suggests a stall in the preceding trend - which is down now. It is not necessarily a trend reversal candle but a signal to the Bears to close at least part of Shorts or Tighten (or lower) Stop loss. The weekly candle is more of a 'Spinning Top' indicating indecision on the part of market participants.

The Trend though is still down but it lacking momentum on the downside. The supports and resistances remain the same for the coming week too.

Supports are seen at 5970, 5877 & 5800. Resistances at 6120, 6180, 6200 - 6220.

Nifty view for the 10 - 14 Feb week

Last week our view played out perfect with the Index declining below 200 DMA and holding above the Fibonacci retracement support of 5920. Even the relief rally could not extend till the first resistance indicated at 6102.

But the index (Nifty) has formed a Takuri (Advanced Hammer) on the weekly Candlestick charts. This is a Strong Bullish reversal pattern when seen in a downtrend. The Japanese word Takuri means 'to test the depth of the water' before taking the plunge. So having tested the depth of water (near bottom) and its ability to hold and stay afloat (push up the prices on 4days of the last week to near high closing), the Bulls will give all their might to push up the Index.

But the Wave studies give a different picture. The downtrend is still intact and further fall is expected if 6200 - 6220 are not taken out on the upside next week.

The supports and resistances remain almost the same for the coming week.

Resistances are at 6120, 6180, 6200 - 6220. Supports are at 5970, 5877 and 5800.

Index view for 5th Feb

Nifty gaped down (on 4th) well below 5970 and hit a low of 5933. It held above the Fibonacci support of 5920 and made a strong dash to 6000 and closed above it at 6009.5.

As indicated on Monday (3rd Feb) break of 200 DMA is not a one day affair. The relief rally is very normal and the short term trend is still down. The rally can continue for a day or two till 6102 and 6160, above which it faces the 6189 ceiling of the big gap formed on 27th Jan which is a stiff resistance.

The extent of relief reduces the downward target. We still believe the next 'wave' of selling has the strength to take the Index to 5877 - 5850 as indicated earlier.

Our Nifty Futures Trades for Feb 2014

3rd Feb, Monday.

Initiated Short on NF at 6095 and booked part at 6072. Trailing Stop at 6070 hit on the second lot after a low of 6055. Ended trading for the day. Our sms server failed and we were able to send the Short trade only to a few who come on yahoo messenger.

Our score for the day: + 48 points (2 lots)
Our score for the Feb series: + 4 points

Jan 31 (Friday)

Having indicated on 30th Jan, that 6100 - 6120 on the Index is a strong resistance band, we exactly did the opposite of initiating a long trade on Nifty Futures at 6121 (near 6095 on spot) and were stopped out at 6098.7 (NF). By the time we realized range bound trade for the index, the up move from 6100 to 6120 was over. 30 point range day.

Our score: - 44 points (on 2 lots of NF traded).

Index view for the First week of Feb 2014

The Nifty index as indicated on 26th Jan is sliding towards 5972. From 10th Oct 2013 the index is moving in a broad range between 5980 - 6360. Now Nifty is at the lower end of the range. It has critical support at 5972 (previous swing low) also the 200 DMA (Day Moving Average) at 5973. Below that 5920 is Fibonacci support. Decline to 5970 and 5920 is very much a possibility. 5877 - 5850 is the next support.

Having said that, the break of 200 DMA is not a One day affair. We need at least two weekly closing below the 200 DMA to confirm its break.

On the upside any relief rally will face resistance at 6102, 6160, 6190 - 6200 and 6220. It is hard to imagine any pullback above 6220 at least for the week (3rd Feb -7th Feb).

Nifty view for the first day of Feb 2014 series

The Nifty index gaped down, below the support at 6100 and broke through 6050 to make a low of 6027.25. It made a stunning 60 point up move (in the last 45 minutes - Expiry) to close at 6073.70. This resulted in a classic "Hammer" candlestick on the daily candlestick chart. But still the trend is down.

The bulls will try to climb to 6130 but faces stiff resistance in the 6100 - 6120 band. Weekly closing above 6130 will be a momentary victory for the bulls - in that the range of 6130 - 6350 is not violated on a weekly closing basis (indicated on 26th Jan, Sunday).

As the trend is still down any break of 6050 - 6040 will bring into picture 6000, 5972 (our outer downside target for the week) and 5950.

Sell on Rise near resistance level with stiff Stops would be a better trading strategy.

Disclaimer: Views expressed though Technical in nature are bound to change dynamically duringmarket hours on dominant crowd behaviour. Loss of Capital is substantial in Derivatives / Indextrading.

Nifty views for 30th Jan 2014 (Jan Expiry)

The Index gaped up but could not sustain above 6150. The fact that even a feeble relief rally was not on tells us that the market participants are not willing to put any risk on trade before the FOMC (US Fed) outcome. The Index just held on to the Fibonacci support of 6110 (day's low was 6109.8) indicated yesterday, at least for the day.

For tomorrow (30th Jan), again 6110 - 6100 is the support, breaking which the index can slide to 6060 - 6050. If the Fed outcome is more than the already discounted figure we may see 5972 (our outside target for week envisaged on Sunday, 26th Jan). Expiry will add volatility and could arrest major slide.

Any up move has 6160, 6190- 6200 - 6220 as resistance.

Disclaimer: Views expressed though Technical in nature are bound to change dynamically during market hours on dominant crowd behaviour. Loss of Capital is substantial in Derivatives / Indextrading.

Nifty views for 29th Jan 2014

Nifty breached 6129 (as suggested yesterday) and made a low of 6085.95 and closed at 6126.25 a near "Doji" at a crucial support. The Short Term Trend is down but the Index has a Fibonacci support @ 6110, then the 6060 - 6050 band.

Any relief rally above 6150 will face strong resistance around 6200 and 6220.

Disclaimer: Views expressed though Technical in nature are bound to change dynamically during market hours on dominant crowd behaviour. Loss of Capital is substantial in Derivatives / Indextrading.

Nifty views for 28th Jan 2014

As indicated yesterday the Index declined to 6130.25 and closed at 6135.85. Looking at the ferocity of the fall the Support at 6129 may not hold. But a Support is a Support till it is broken. The Index might slide to 6060 levels if it conclusively breaks 6129 and 6100. Outside target for the down move is 5972.

If the support at 6129 holds the Index might attempt to scale 6200 and 6220. The probability of move above 6220 looks bleak unless the predictably "unpredictable" RBI Governor springs a positive surprise.

Disclaimer: Views expressed though Technical in nature are bound to change dynamically during market hours on dominant crowd behaviour. Loss of Capital is substantial in Derivatives / Index trading.

Index Outlook for the last week of Jan 2014.

The Nifty Index has been range bound for quite a while between 6130 - 6350 after making a life time high of 6415.25.

Heavy selling on Friday has resulted in a "Shooting Star" formation on the weekly charts. The Index might decline to the lower end of the range early next week. Any break below 6129, will increase the probability of the Index heading towards the swing low of 5972.

Any up move will face strong resistance at 6400. Move above 6400, will result in new life time highs, the chances of which look remote next week.   

The RBI meet on 28th and US Fed meet on 28th & 29th monetary policy will have major bearing on the Index next week. The quantum of tapering by the Fed will add spice to expiry. Caution is advised.

Disclaimer: Views expressed though Technical in nature are bound to change dynamically during market hours on dominant crowd behaviour. Loss of Capital is substantial in Derivatives / Index trading.

Nifty view for 24th Jan 2014

Well, Technicals and Levels don't change much. Same old story (indicated on 21st Jan). Resistance zone is 6346 - 6362. The Index is yet to close above 6346 - today's close 6345.65. The only positive is the Index is inching up and not giving away. The market needs a trigger (or execuse) to break-out or break-down.

A break above 6362 - 78 is needed, for the eventual dash to 6415 / 6420. The only change is tightening of trailing stop. Now 6320 - 6300 is the stop for long (for tomo).

Disclaimer: Views expressed though Technical in nature are bound to change dynamically during market hours on dominant crowd behaviour.  Loss of Capital is substantial in Index / Derivatives Trading.  

Nifty view for 23rd Jan 2014

The Index attempted the move up but could not close above 6346. The Index view remains the same as for 22nd Jan.

Disclaimer: Views expressed though Technical in nature are bound to change dynamically during market hours. Loss of Capital is substantial in Derivatives trading.  

Nifty views for 22nd Jan 2014

The Index - Nifty - faces strong resistance in the 6346 - 6362 band. If Nifty manages to get past this band, we might see 6415 and more in the days to come.

On the flip side break of 6300 and 6280 will see the Index declining to 6230 then 6200. With Bank Nifty showing signs of breakout on the upside, the possibility of the first scenario playing out is more.