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.