Incisive Nifty Trend Analysis

prada

Well-Known Member
It was quite unfortunate that one of my very high conviction trade got stopped out. It might eventually go in the intended direction but after taking out the stops. We as retailers cannot afford to have wide stoplosses unlike institutions. Institutional stops will probably be at the previous swing high of 15180. This is just one disadvantage of trading with limited capital. I still maintain my overall bearish view on the market as long as we have a very clear LH-LL formation on Nifty.
For the chart Gazers:

tvc_8bc5294357df6c8298618908483e17c4.png

tvc_eb845f34affa472fea5e4785731bdf83.png


Looking at the above two monthly charts which are risk assets, getting rejected from the highs consecutively twice. This doesn't give a comforting feel. Reclaiming the highs without a meaningful pricewise/timewise correction is ruled out!

PraDa.
 

prada

Well-Known Member
Hello Members,

In my post dated 13th Feb, I had clearly cautioned you'll regarding the upcoming trend reversal and that the next big trade will be on the downside. What a terrific move we have witnessed so far. Although there was a shake out move that played out couple of days back, it just wasn't convincing to me. Many were expecting a budget week sort of a move to play out, but I was confident that it was a fake out/bull trap. Expect an acceleration in the week ahead if the last pivot low of 14635 resists. Price action around this level will indicate the next big trend. This is the war zone +/- 100 points. In my opinion we have entered a multi week style of correction and it will take some time before we see new all time highs any time soon. Corrections are always healthy for the market ! Avoid bottom fishing unless the price action indicates otherwise. Initiate fresh shorts on pull backs and have strict stoplosses in place at the previous hourly pivots. The last hourly pivot is now at 14700 (spot). Support/Resistance bands for the previous week, worked like charm. Now for the coming week Support band- 14230-14370, 13960-14098 and 14430 being a critical weekly support level. Resistance band- 14650-14730, 14790-14870. In a bull market linear corrections suggest we will have sharp retracements and that the chances of uptrend being intact is high, but these a/b/c style corrections call for attention. This can challenge the primary trend especially after a very very sharp run up! Stay very cautious if you are a near term bull.
Coming to bank nifty! check the chart below which is very self explanatory. Neckline break gives a pretty straight forward target of 32500 which is also confluence of supports. Pretty safe re-entry opportunity coming up if one is on the side lines to buy. There is a demand zone band at 34000-34500 which should eventually give way!
View attachment 45581

My trade rationale on Friday before close. Chart below. Being a conservative trader, I patiently wait for a confirmation to add to my existing short positions. Risk:Reward > 3 seemed quite appealing to me. Good luck to your trading! Have a great week end!

View attachment 45582
In the above post , I had mentioned an important point regarding the nature of correction being witnessed and the challenge to the primary trend. It wasn't a linear one and landed up being a distribution. We have seen a breakdown from distribution. Longs if any needs to find an immediate exit. This doesn't look good and looks like it will get uglier. Will post my analysis when I find time!

PraDa
 
When I wrote a few months ago to you Prada I wasn't expecting much of a reply as I thought you have moved on from the forum. But I am pleasantly surprised. I would be visiting the thread regularly now to keep getting your views.

Thanks again.
 

prada

Well-Known Member
Good morning Dear Members!

I want to start my analysis with the charts of Nifty and Bank Nifty!
Nifty.png


BN.png

Trendlines drawn above have some significance since it connects the closing prices from September( start of the powerful rally). Nifty at the moment is doing a back test whereas the Bank Nifty has shown signs of a failure after the back test. Once BN breaks recent lows, we should see a sharp decline in the indices. First major support for BN is around 32300-32500 area ( previous consolidation zone). It will be worthwhile to try a safe long here with a small SL. Break of the above trendline support is a major technical development to keep a close eye on. The next few sessions will pave the trend for the new series/month coming up. I'm personally quite bearish on the market and I reserve the right to be wrong! All the best to your trading!
PraDa
 

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