Nifty : What to Expect Now?

Markets have taken nosedive from the all time high levels and for the last couple of sessions they are showing no mercy. The amazing part of the correction is that while the index has hardly corrected 10% the individual stock portfolios have taken plunge up to 30 to 40%. Anyways let us now focus on technical part and try to analyse the current situation.

The breach of 9000 levels led the accelerated moves toward the 11000 levels as technically it was the Neckline area of inverted H&S pattern. The pattern target was +2000 points from 9000 which it did and did it at a lightning speed. The Nifty darling has now entered a correction phase and we already have the correction of more than 1000 points. The darling today tried to kiss the very sensitive part i.e. its 200 DMA which is placed around 10131. Fortunately the bulls still have maintained it on a closing basis. As per the Fibonacci Levels the darling has kissed 76.4% retracement level which coincidentally is around the sensitive part that we mentioned.

As per the Open Interest Data liquidation was seen at 10400 PE & CE strikes which indicates some profit booking by bears and panic situation for the bulls. 10000 PE Strike has OI of 4 lac which clearly suggests the strong support area as of now. VIX was also down by almost 3.5% which is quite surprising.

From the above observations we are of the opinion that we may see sharp bounce towards 10250-10300 levels provided bears fail to breach 10000 level on a convincing manner. On the other hand if 10000 is breached convincingly we may see further panic selling across the board. As the breach of 10000 mark means 200 DMA gone, 74.6% retracement gone and PE writers may be forced to cover the shorts which may add fuel to the fire. Consecutive closes below 10000 may drag the darling to 9550 levels which is the Golden Ratio i.e. 61.8% retracement level. On the upper side 10400-10650 may continue to act as resistance zones.

Nifty

As mentioned in earlier post 8655 is the tough resistance zone which the Index could not cross today and witnessed selling pressure during the closing session of the market. It found support at the mentioned level of 8576 and finally closed at 8590.65 i.e. below 8600 level.

Liquidation was seen  at 8500 & 8550 PE strikes  though no major addition was seen at 8550 CE strike. 8600 CE is having total OI of 44.88 lac whereas total OI at 8600 PE is 26.46 lac. 8500 PE strike has total OI of 48.55 lac. VIX closed at 15.62 and PCR declined to 0.9. So the broad range of July Series seems to be 8500-8600.

Intraday Support - Resistance

Resistance 8631-8672

Support 8563-8535

Nifty : Will it sustain above 8600 Levels?

Though the Index witnessed flattish opening, gradually it started recovering and finally managed to give a very powerful close above 8600 mark. It faced resistance around 8600 levels on multiple occasions and finally today surprised the bears by through out sustaining and closing above 8600 mark. 

Heavy OI addition seen at 8550 & 8600 PEs Strike. On the other hand Bears were forced to liquidate their positions at 8600 CE Strike. Total OI at 8600 CE still stands at 52.77 lacs whereas at 8600 PE it is 28 lac. The next tough resistance is around 8655 levels which once crossed on the closing basis may create panic among bears and the Index may rally up to 8720-8750 levels. 8500 PE Strike is having highest OI suggesting strong support. VIX closed at 15.71.

Intraday Resistance - Support

 Resistance 8680-8722

Support 8598-8576

Nifty Darling: Short Term Double Bottom?

The darling has been in a downtrend for the last few weeks. However this week it formed a bullish candle with lower shadow signalling supportive efforts at lower levels.

The darling formed a higher high and higher low as compared to previous week indicating positive bias. Besides it has managed to close above last week's high thus confirming the bullish double bottom in place at recent low of 7714.

On a daily chart too it has managed to close above 20 DMA. It seems that it has formed a strong base around 7800 levels during recent past. Technical Indicators too have turned bullish confirming the view of short term double bottom.

Our VIX & PCR reading too confirms the continuation of the current up trend.

In a nutshell as long as 7830 is not breached on a closing basis the view remains bias and we expect the Darling to kiss at least 8100-8150 levels in a short term

Nifty Darling

The darling didn't even touch 8315 levels discussed in previous post and took a sharp U-Turn and kissed 8600 mark. It has been trading above its short term moving averages as well as 200 DMA. Besides there is a cross over of 20 & 50 DMA which is quite a bullish signal. On a weekly chart too the momentum has started shifting and the darling is showing signs of steady recovery. The only weekly resistance is placed around 8660-8672 zone which once captured on closing basis we expect 8800-8850 levels quickly.

As per Options data 8500 PE is having highest OI suggesting strong base 8500 level. VIX is trading in very comfort zone around 13-15 mark. So the momentum is clearly in favor of bulls. At this point no short position is advisable.

Nifty Darling

In our previous post it was mentioned that weekly close above 8480 may add more fire however bulls failed to capitalize the move and the darling closed near its 20 WMA. On a daily chart the index has found support around 20 DMA however it has been closing below its 200 DMA for the last three sessions. Putting weekly and daily observations together it seems that the markets are trading in range of 8315-8500 in search of further directions. Short term Bias seems to be slightly bearish as long as 8480 is not captured on a closing basis. The bearish view will be reinforced once the darling closes below 8315.

Nifty Darling- Finds Supports At 200 DMA What Next?

In previous post it was clearly mentioned that weekly close above 8480 levels may prove fatal for the bears and the darling may continue its northward journey intact. As expected the darling witnessed sharp recovery during intraday having opened gap down due to weak global clues. In today's session the darling found exact support at its 200 DMA and took U-Turn which is a clear signal by Bulls that they are in a no mood to weaken their grip. As per Fibonacci Retracement the darling found resistance around 50% placed around 8540 levels. Technically it is dancing above its short term moving averages and has also developed Falling Wedge Pattern on a daily chart which has already been discussed in earlier post. Besides other Technical Indicators are still in a quite bullish territory and VIX closed in red and still in a comfort zone around 16 levels so 8672 levels can be expected in a short term where the Golden Ratio is placed.

So the view is clearly in favor of the bulls and as long as 200 DMA is intact traders should utilize every dip as a buying opportunity. The simple strategy is to jump on the bandwagon rather than bucking the trend when the prices are trending higher. As long as 8380-8390 area is intact the darling may trade with positive bias in sessions ahead. Immediate support at 8480 while immediate resistance 8540.