Incisive Nifty Trend Analysis

[descartes]

Hi PraDa

It has been two years and a lot of water has flown through. Wonder whether would you be keen to revive your good analysis thread.

Thanks.

 

[prada]

Hi PraDa

It has been two years and a lot of water has flown through. Wonder whether would you be keen to revive your good analysis thread.

Thanks.

Hi Descartes,
Will try my best to revive this thread and post more often. Hope you've been able to participate in this bull mayhem We have reached a very important point in this leg. Will try to analyse the market and post my analysis.

PraDa

 

[prada]

Dear Members,
Wishing one and all a very Happy Republic Day!
Now coming to the analysis. One look at the chart and even a layman can understand that we are in a very strong uptrend on all large time frames. However every uptrend needs a corrective phase and a meaningful one. We haven't had a meaningful correction for quite sometime. Looking at the price action in the last few days, clearly suggests that we have commenced this phase. If this is a pricewise/timewise correction similar to the one we've had before then it could last for 3 weeks and could probably pause at 13750 ( decent support too). Market needs some time to pause and rest after the relentless run it has had. Since the short term trend has turned negative, this is now a sell on rally market. However since we have had a vertical fall from the highs and since SGX suggests a deep cut tomorrow, I will look to buy the dip into support after studying the price action for a swift counter trend move to play out. There is a strong demand zone at 13950-14150 area which should act as support at least until budget.

Happy Trading!
PraDa

 

[timepass]

Dear Members,
Wishing one and all a very Happy Republic Day!
Now coming to the analysis. One look at the chart and even a layman can understand that we are in a very strong uptrend on all large time frames. However every uptrend needs a corrective phase and a meaningful one. We haven't had a meaningful correction for quite sometime. Looking at the price action in the last few days, clearly suggests that we have commenced this phase. If this is a pricewise/timewise correction similar to the one we've had before then it could last for 3 weeks and could probably pause at 13750 ( decent support too). Market needs some time to pause and rest after the relentless run it has had. Since the short term trend has turned negative, this is now a sell on rally market. However since we have had a vertical fall from the highs and since SGX suggests a deep cut tomorrow, I will look to buy the dip into support after studying the price action for a swift counter trend move to play out. There is a strong demand zone at 13950-14150 area which should act as support at least until budget.

Happy Trading!
PraDa

View attachment 45361

What would be the profit booking area for this ? That 14000 zone could be seen as a neckline with the left shoulder and head having formed.

 

[prada]

What would be the profit booking area for this ? That 14000 zone could be seen as a neckline with the left shoulder and head having formed.

I'll probably use tomorrow's pivots. It all depends on the price action.

 

[prada]

Price action suggests that market is preparing for a short covering move from these oversold levels and from these strong support levels

 

[prada]

Price action suggests that market is preparing for a short covering move from these oversold levels and from these strong support levels

Although market is moving lower today, the price action isn't looking bearish. I can see lack of momentum on the downside. We will see a sharp pull back in the next two days. We are at strong support levels. I will stay away from shorting and look at buying the dips.

 

[prada]

Nifty has defended the most important 13750 level on closing basis. I still maintain my few that , market is ripe for some short covering. Short covering can extend up to 14250-14300. We are in a strong short term down trend, but we should see some respite even if we are heading further lower. Buy on dips and keep a strict SL of 13700 on closing basis. On the way down we didn't form many pivots on the hourly chart( small one at 14260) because of the nature of the fall, and hence if the short covering picks up it's nature will be very similar to the fall we've witnessed.
Good luck!
PraDa

 

[prada]

Advise extreme caution on long positions. Wait for a meaningful dip to re-enter. Loss of momentum is visible. Market can surely grind higher on momentum loss but the risk:reward isn't favorable! Will try to post my analysis when I find time.
Good luck!
PraDa

 

[prada]

Hello Dear Members,
We have witnessed a terrific rally so far in February. In one of my posts, I had repeatedly advised not to short the market at 13750 levels and clearly indicated market was to witness a very very sharp bounce back. This is what happens when the long term trend is intact! Coming now to what is expected going forward. We are seeing contraction happening at these levels and there is visible loss of momentum. Contractions/Expansions are part of any trend but the juncture and context is very important to understand. The rally we witnessed in the first week of Feb and most visibly in bank nifty certainly looks like a blow-out top. It covered the entire monthly range in a single week. These are tell tale signs of over heating especially after 100% gains in less than a year on an index. This doesn't mean we go ahead and short the market without price action confirmation. However extreme caution is warranted when there are visible signs that market is heading for a meaningful correction. Market can surely continue to nudge higher incrementally, but I will refrain from participating on the long side positionally. The next big trade I am looking at is on the downside. Will post my analysis once I spot something interesting. Weekly support band for nifty- (14970-15080) & (14650-14780). Resistance band -( 15170-15250).
All the best to your trading!
PraDa