Tag Archives: Nifty Technical Analysis

nifty technical analysis, daily technical analysis on nifty

What to do now???

Hello Friends,

Today I got a chance to speak to one of the subscriber of Gann Square of Nine Method. It seems in last couple of days he lost his hard earned money and obviously now he was in search of some black box system which should work in all market scenario. He asked me few questions and i thought this questions are not only his questions, but in general all the participants must be thinking in the same way. Hence this article.

  • Friends, first look at this chart Nifty. I had nothing but drawn a simple trendline from the lows of Jan 2016 and adjoined to next two important swing lows, out of which one trendline is already broken and another is about to test in days to come, or God Knows if it will tested just today itself. Point of support based on this trendline is somewhere near 10180.
  • Secondly, on chart 14-pd RSI is plotted on down, where one may clearly see that RSI has broken the previous swing low, whereas price has not which is 9951. So in technical terms it is called as Hidden Bullish Divergence. Which indicates that after tremendous selling pressure possibility of pullback can’t be overruled.
  • Next one may see INDIA VIX which has made a high of 20.48 and lastly settled at 19.73.  On 8th Feb,18 it made a high of 24.035 wherein from it cooled-off. Importantly if we see in past, even after VIX cools-off from the highs, prices may continue to decline initially and after few days it starts recovering. So, it is better to assume that INDIA VIX may initially rise and eventually it starts cooling-off but that does not indicate bottom reversal.
  • And lastly one more important observation, If we see Average Range of Nifty, it has shot up dramatically, and it is not only Index but Average Range of most of the stocks has tripled, which is not obvious.

Now, how to interpret this data and how to poise ourself in the market. First and foremost you have to decide, why you are in the market,

  • For Excitement and Thrill
  • For taking Revenge
  • For making Money

If your answer is 1 or 2 then you are most welcome and enjoy the ride, but if your answer is 3 than my sincere suggestion is to wait for a while, no matter how good you are or bad your system is. Mostly none of the system discounts such a high volatility with such a wide Average Range. Take your prudent judgement and save your money from big time loss. If you are Investor than start accumulating selected stocks in a staggered manner. And if you are Trader than Just Relax, wait for VIX to come in its territory and wait for Average Range to switch to normal course.

Friends, i can give you couple of other points of analysis, but don’t want to confuse you much. I try to keep it simple. If you have any query feel free to ask me. I will answer you for sure.

Does Market is topping out???

First my apology for such a long break, as due to some health issues I was not able to send weekly newsletters, I hope I may able to continue this activity in future. Purpose of writing today is just one email and few phone calls, yes. In the last week I received one email from one of my newsletter subscriber that “Sir, can I go short at these levels?”  Question was simple and straight, and if preferred I would have given answer in one word Yes or No, but I thought let me try to elaborate this answer with some points, and I know that this question is not only in senders mind but most of the traders must be thinking to find the answer. So I am making a small attempt to rationalize my answer, and its upto you whether to buy my idea or not.

I had an opportunity to speak to lot of market participants day in day out, few of them are extremely smart and couple of them are innocent and trades with irrational approach, and thats the reason why market is running, because if everybody starts thinking in same line then from where the equilibrium is going to come. So let me tell you what I hear from them “Sir, I shorted Nifty at 8300 levels can I rollover for next month”, “Boss, look at the PE of Nifty, it is trading near the highs and for sure market is going tocollapse, I am creating shorts, what max higher it can go, please tell me the level?”, there are few “Sir, didn’t get a chance to buy in market, can i buy at current levels, please suggest the stop loss”, “You know I was out of town (one of the excuse), so couldn’t create any longs, but now we’ll not miss the shorting opportunity” (now this guy may have capacity to stand in wrong direction of 100-300 points, but will book profit in just 50 or less than that, but have some emotional log to carry tops and bottoms) , and also there are few forecasters (who also forecast for day-hours-minutes), who are in just search of to call tops and bottoms, there are other who likes to remain contra every time and out of ten even if they go right 2-3 times they remain star of channel. Now after hearing so much diverse opinion few things comes in my mind – firstly, there is strong left out feeling in many retail and I also believe that there are few funds as well whose earlier call was that market is likely to collapse near 8000 levels, so by force this guys are going to work in the market, may be by compulsion or may be due to obsessions. Secondly, there are already few contra shorts seating in the market, earlier their stop loss was 8700 and now may be they must have shifted base to 9100 or 9200 (they believe that market will not go above that). And lastly few turned analyst will argue that market is in overbought territory. This are just psychological aspects which I discussed, there is no concrete aspects to support the idea, just biased notions, herd mentality or something else.

Now let’s check what charts are saying.nifty daily chart

Above is daily chart of Nifty, you can see that Nifty have given breakout from a consolidation almost after a month with rising volume.

nifty weekly chart

One may see on weekly chart, that trend is clearly defined and indicating further surge in weeks to come. So why to doubt at these juncture.

Similarly Bank Nifty weekly chart is poised with bullish bias, however on daily charts it is showing an early signs of exhaustion, but unless we get any confirmation, it is better to stay afloat.


Above is Nifty and India VIX chart, now one may see that VIX may continue to trade in lower territory and Nifty continue to rise, yes we might see some knee jerk reaction in between, but that is part and parcel of the game. It’s like this when market is in jubilant mode it can stay afloat in overbought territory for a long.

If we see FII’s data they are heavily long in Index futures and at the same time they are taking bullish bets through options, otherwise generally they keep some hedge with options. In the last week we observed that even DII’s are turning buyers in the market, in most of the cases they remain mean reverting player, whenever FII’s are buying they are selling, but this time it is not the case.

Okay, so with above all arguments one may derive few points.

1 – There is strong left out feeling in the market, and this crowd may take wrong position in hesitations.

2- Charts and data is clearly suggesting bullish bias.

3- If market go against this contra crowd then they will take markets further higher, who knows where market goes in short covering.

bears trap1

bear trap2

And like this strory continues…

So, to answer my friends query I would say that don’t try to preempt the markets, stay afloat with existing trend which is bullish. Don’t try to fall in trap with forecasting of tops, at max what you may miss is 100-200 points if at all top is placed or in offing. Can you create fresh long at this juncture, then answer is yes, but very subjective; if you are trader trading with just one lot then please trade with financial stop loss, and if you are positional trader with capacity of more lots than take just 25% of qty what you trade, average on dips with tight stop loss of 8500. As of now charts are suggesting to go short only below 8450-8500 levels…period.

Nifty Weekly Technical Outlook for 18 Jan’16

Bumpy road ahead???

Passed two weeks remained superficial for hardcore bears and nightmare for bulls and current global as well domestic scenario clearly indicates that going ahead road is going to remain bumpy only-no smooth ride. As markets continued to slide down and down and ultimately Sept’15 & Dec’15 swing lows are also taken out. Now how far can we go, as I already started hearing about 6300 and few of my bear friends also mentioned about sub 5500 levels, do you heard that? Anyway it is common phenomenon, whenever such erratic moves happen you’ll start listening some extreme views from extremist, whoever it is Bear or Bull. In such turbulent times let’s see whether we should go contra or join the hands in existing carnage

To read full report you need to Register here (it’s free) and if you are already registered then there no need to register again, you’ll shortly receive newsletter.

nifty weekly analysis 18 jan 2016

Nifty Weekly Technical Outlook for 04 Jan’16

2016 – Will you going to surprise us???

Markets always surprise us, don’t you think so? Up till 2013 nobody was sure where market is heading, and in March’14 Nifty gave breakout which was a like dream run for any hardcore bull, rally which continued for almost a year, and only ended in March’15 after clocking an all time high of 9119.20. In last 9 months from highs Nifty is down over 17%, but if we see couple of heavy weight stocks which are down significantly and trading near 52-week lows, so structurally there are lot of divergences. Rather delving into forecasting let’s see how objectively we can position our self in near future.

To read full report you need to Register here (it’s free) and if you are already registered then there no need to register again, you’ll shortly receive newsletter.

nifty weekly outlook 04 jan'16

Nifty Weekly Technical Outlook for 07 Dec’15

Moderate start..Unexpected end

Often when start is good (in our case it was moderate), expectation increases that everything is going to be as per plan, and when actually it ends in line with our expectations, it gives feeling of satisfaction, but when it does not fructify according to the plan then the feeling of devastation is much higher than feeling of satisfaction. Essentially my point is, in the beginning of last week when markets attempted to move higher, I thought it will move according to expectations, but on Wednesday market gave one shock and thereafter it took U-turn. According to my experience and understanding it becomes difficult for particularly traders to change their gears and take quick U-turn with market; I know many traders would agree with me. Let’s analyze and see how to place ourselves in the coming week.

To read full report you need to Register here (it’s free) and if you are already registered then there no need to register again, you’ll shortly receive newsletter.

nifty outlook for 07 dec onwards

Nifty Weekly Technical Outlook for 16 Nov’15

An uninspiring start of Samvat 2072…

Just ahead of Muhurat trading session Govt declared FDI bonanza which gave fillip to market on Muhurat Day, but that was it after opening gap up market remained moreover lackluster, so no opportunity to book some marginal profits and on next day we opened straight gap down. At the face of it for me it was very Uninspiring Start of Samvat 2072, but rather being superstitious I would prefer to stay objective, and look for another opportunity, that is what my experience suggest me. So lets analyze and see how to position our self ahead of expiry.

To read full report you need to Register here (it’s free) and if you are already registered then there no need to register again, you’ll shortly receive newsletter.

samvat 2072 nifty weekly report

The week passed by…

In the last week Nifty formed candle like Inverted Hammer or it can also be treated as Doji, nevertheless it indicates that selling pressure at higher levels and all eyes would be on weekly low (7730.90).

Once again technical structure of NF is stands at crucial juncture and if selling pressure may intensify then it may drop towards Sept low 7540.

I prefer to look at 14-period RSI and on weekly as well daily time it is clearly indicating to me that we are in a bear trap of the market, however considering oversold scenario of the market possibility of minor pullbacks can’t be overruled.

CNXPHARMA now NIFTY PHARMA reached to an extreme oversold condition and after 2-3% further correction, I am expecting some sharp rebound in Index that is what price history suggest, so keep tight watch on this index and try to grab opportunity here.

NIFTYAUTO witnessed profit booking in last session, as AUTO stocks were performing better in compare to others. Chart structure indicates that after 1-3% decline it may resume to move higher again, however let’s see what damage it can handle.

One chart strikes to me is NIFTYIT which is likely finish its round of correction in the coming sessions, as like other charts after blip of 1-2%, I expect some smart rebound here, keep fingers cross.

Lastly, if you see NIFTYBANK it is still holds above its last Monday’s low, whereas NF already breached below this level, exhibiting divergence between NF & BNF. If this continues then chances of recovery in NF becomes much stronger.

Derivative Insights

In the month of Nov till date FII’s remained consistent seller to the tune of 3743 crore, whereas DII’s are net buyer of 2378 crore.

Week on week basis FII’s have reduced NF long position of 28k contracts whereas added 38589 short contracts. If we see in stocks, they added just 5449 contracts and stock short contracts are 21282. (In compare to previous weeks reading position are almost same, just the quantum has changed)

On the options front they maintain 1:2 ratio where 25309 option contracts are long, while 51411 puts are long.  And opposite to it 52746 calls are short and almost NIL puts are shorted. Above observation clearly indicates that till date their bias is clearly negative and for every one long contract they are creating 2 short contracts or may be hedging parallel.

8200 7,339,650 5,832,900 7700
8000 5,740,200 3,986,550 7800

On looking at NF options data maximum call interest lies at 8200 & 8000 strike price to the tune of 74 & 57 lac contracts. While maximum open interest in puts are at 7700 strike to the tune of 58 lac contracts and followed by 7800 strike 40 lac contracts.

Last week’s review – Technically, we are standing close to crucial support of 7850, so I expect any pullback towards these levels should be utilized for buying, don’t be so aggressive, but stay on long side, and on the upside 8120 will remain next resistance to watch for.  So, my expectations were thrashed by market –lesson I learnt is be objective, don’t get carried away by psychological expectations.

With fresh thought, current technical structure suggest me that we are standing near the junction, if bulls will fail to defend support area than bears will kick them in their next trajectory which opens big space for them. Level specific, NF has a support near 7670-7700 levels, if fails to hold above this level, then I think possibility of retesting of 7540 or moving further below can’t be ruled out. So until NF holds below 7950 levels I assumed to remain short in market, and start opening short below 7700 mark. Alternatively for Bulls to retain the confidence we need to close above 7950.

Nifty Weekly Technical Outlook for 09 Nov’15

Happy Diwali and Welcome Samvat 2072…

Diwali and New Year has always been a very special occasion for stock market and every market participants, and even for me. I would admit that today I am in market just because I saw Diwali of few punters in my society and got attracted towards market, (someday I’ll write about all those days). Samvat 2071 is going to end at similar juncture wherein from journey started-near to 8000 level, so statistically there is no gain or no loss year on year basis, but that is not the case, journey remained roller coaster, Nifty made a high of 9119.20 on 04th march’15 and made a low of 7539.50 on 08th Sept’15 and now we stand at 7950 levels. Let’s analyze what should be our strategy for near future.

To read full report you need to Register here (it’s free) and if you are already registered then there no need to register again, you’ll shortly receive newsletter.

diwali report samvat 2072

Nifty Weekly Technical Outlook for 19 Oct’15

Nifty above its major average…

After almost fourty days of dilemma once again market is pouring hope in to the minds of trader. You must be thinking why I am writing this-yesterday one of my friend called me to confirm my view, first question was are we ready to for new highs?  And I was little shocked, and he gave one another shock is it possible by January or max by February? I understood that he is not asking, but he is conveying his own view, and I answered him what is your gut feeling, he said it is very much possible. In the hindsight I was thinking that just few days back traders were searching reasons of collapse, then what can come to rescue the fall, after stoppage again hope of revival and reasons to push the market higher. Its not the objective way, I think right way to approach the market, should always be focus on next possible area of confluence or area of least resistance. In this weekly report we’ll analyze and see how to approach the market, and stay on the right side.

To read full report you need to Register here (it’s free) and if you are already registered then there no need to register again, you’ll shortly receive newsletter.

19 oct weekly outlook

The week passed by…

  • In the first three trading session momentum was appearing slightly bleak, however by Thursday & Friday wings turn on other side, and scenario start appearing optimistic. Week on week basis Nifty closed with gains of 48 points and formed candle Hanging man, essentially it tells us buying interest at lower levels, but at the same time we should take little caution as well.
  • Finally, NF closed above its major 200-DEMA after 36 trading sessions, which gives me little hope of recovery, and also 50 & 21-DEMA (8060-8080) is placed at lower levels to support the price on any minor correction.
  • NF has filled the gap of 8060-8225 and closed above it, and on moving above weekly high, it will target for another unfilled gap near 8322-8360 levels.
  • Amongst the oscillators 14-period RSI is exhibiting strength, however I need furthermore confirmation from it, but as of now flow suggest bullish bias.
  • As depicted in attached, while drawing trendline from swing highs, we get two lines which and that is the area where NF is going to face utmost resistance, because this is the area above which underlying negativity may cooled-off and NF targets for higher levels.
  • Among other Indices, Bank Nifty appears to be prepared for next leg of rally, and chart structure of NF & BNF looks similar.
  • On Friday CNXAUTO has formed Star candle and now we need to see whether it turns out to be a Evening star, so keep watch of Monday’s closing, otherwise setup appears to be decent enough.
  • CNXIT disappointed the participants, or lets put it in right sense, major IT companies had disappointed market participants or Research Analyst community. Here once again I remember Ace Fund managers tweet

  • CNXMETAL after a flurry move in earlier week, turned quite in last week. So once again, better to take profits on the table, and wait for next move.
  • Keep watch on CNXMIDCAP, as such in last week was not much happening here, but it seems that next week can be action pegged here.
  • Structurally CNXPHARMA is forming Ascending Triangle kind of a formation, but mind you it is not always necessary that breakout comes on the upside only, it can come either side. To turn bullish wait for 13400 to cross.

Derivative Insights

  • Till date FII’s have infused more than 3100 crore of capital, whereas in just single day (Thusday) DII’s bought to the tune of 2744.55 and now for the month they stand at 2300 crore (sheer jump from negative to positive)
  • Week on week basis FII’s have cut there long position to the tune of 59386 contracts and to similar extent shorts are build 50932 contracts. It seems that institutions have done some profit booking or reduced their position to tune of 1452 crores.
  • Interestingly if we observe Options build-up of FII’s only, then they are long call options 91213 contracts and Put longs are reduced by 61934 contracts. At the same time they have unwound call shorts are build by 89469, while 46021 Put contracts are short build. Above points indicates little cautiousness, like last week FII’s are not very bullish on the market.

Last week’s review – I expect in this week markets are likely to remain highly volatile, as nobody will turn out to be clear winner. Level specific, NF on sustaining above 8225 will target of 8325 levels and may be it can target for 8390-8400, but sustenance near this level is a big challenge. On the downside supports are placed near 8100, and till NF holds above this level, I prefer to stay long if at all it corrects below 8000 then one think to create shorts, between 8100-8000 is neutral zone..  Weekly low for the NF was 8088.60.

As on Friday NF stands at 8238 and weekly high is 8246.40. On the top I had clearly mentioned that weekly candle suggest little cautiousness, so it is better to turn little skeptical, and allow NF to hold and sustain above 8250, if it does then stay put with long position and target for 8325-8350 levels, and if fails to do so then allow for some retracement upto  8150-8130, where one may take some risk and go long keeping stop loss below 8080.

In the attached chart I market big circle which is area of confluence between 8350-8400, and my anticipation is that, this area will not be taken out so easily, so in the first go I would prefer to take the profit on table, and then evaluate for next move.

Nifty Weekly Technical Outlook for 12 Oct’15

They say there are two sides to everything. But there is only one side to the stock market: and it is not the bull side or the bear side, but the right side. – Reminiscences of a Stock Operator

Isn’t it a Golden Rule of the stock market. We all are stuck with our own prejudices, some are hardcore bulls and some are happy to be Bears of the market, but real trick is to stay on the right side of the market. Essentially it tells us to be objective and not to get drive away with your own biases. Honestly it is very difficult to follow this simple discipline in the market, but if we don’t follow this rule then most of the time you find yourself in a situation when you don’t have any convincing trade to take, and if at all you are taking then it will be by force but not by choice-now force could be anything, it can be your boss, it can be your own psychological compulsion to always stay in a market or may be something else. And now with experience I can surely tell you that if you are convinced about any trade then you are not taking trade but you are betting in a casino without knowing any rules of the game i.e playing Blind.And why to play Blind when you can correct yourself.  At Way2Profits my objective is always to play safe and conservative, as Money Saved is Money Earned, isn’t it.

To read full report you need to Register here (it’s free) and if you are already registered then there no need to register again, you’ll shortly receive newsletter.


12 oct nifty view

The week passed by…

Monday turned out to be a fantastic day for bulls as NF moved strength to strength, but rest all four sessions kept market participants in skepticism, as volatility kept traders on their toes. If we see weekly candle then it clear indicates positive bias, but most of the gain came in from Monday’s move.

  • Technically speaking, NF managed to fill the gap 8060-8225 created on 24 Aug’15, but that’s it, it just filled the gap and turned back, as selling pressure near the highs dragged NF again lower.
  • As depicted in attached chart, NF is hovering near its 200-DEMA (8184), and incidentally when NF has opened gap down it broke the support of its 200-DEMA and when it is filling the gap it is standing on the brink of its average, which clearly indicates its importance. Historically, if we see then since from 2012 NF stayed below its 200-DEMA for maximum time of 40-days and till date we have completed almost 33 sessions, and even if we see previous price behavior than in that case also in last 5-7 trading session NF was hovering near the average, that is what we are doing at this point in time. Based on this hypothesis may be for next week NF may remain sideways, and eventually surge higher.
  • Bank Nifty is also facing resistance of its 200-DEMA, but it failed to fill the gap with slightest margin.
  • Similar is the case with CNXAUTO, which is struggling near its 200-DEMA and not filled the major gap.
  • But if we see CNX IT Index which is sustaining well above its 200-DEMA and it has filled the gap very early in the last month only. We should also not forget that INFY is going to announce its results on Monday morning, followed by other major companies, which will set the trend for coming sessions. Similar is the case with CNX PHARMA Index.
  • If we see on standalone basis then CNX METAL was the star performer of the week, forming excellent reversal pattern, but looking at structurally bear move of past, we should take this as dead cat bounce from oversold territory, and play only for short term bounce.

Derivative Insights

  • In the month of October FII’s have infused capital of around 1500 crore.
  • Week on week basis FII’s have built 188274 contracts in future Index, while only 7581 contracts are shorts. So they bought almost worth of 4031 crores.
  • Interestingly if we observe Options build-up of FII’s only, then they are long call options 90849 contracts and Put longs are only 66444. At the same time they have unwound call short options to the tune of (-) 34481, while 122657 Put contracts are short build. This clearly indicates bullish bias to me, as they are building not only long contracts but they covering their call shorts and adding further in put shorts.
  • Last week’s review – I would prefer to stay long only above 7950, stop should be placed below 7880, looking for upside of 8050 and if NF manages to sustain above 8050 then 8200 would be next level to watch for.  Expectations turned out to be in sacrosanct with market move

According to me, NF stands at a Inflexion point and that is the reason we are see such a high volatility in the market, because from here on one party will start dominating other. I expect in this week markets are likely to remain highly volatile, as nobody will turn out to be clear winner. Level specific, NF on sustaining above 8225 will target of 8325 levels and may be it can target for 8390-8400, but sustenance near this level is a big challenge. On the downside supports are placed near 8100, and till NF holds above this level, I prefer to stay long, if at all it corrects below 8000 then one think to create shorts, between 8100-8000 is neutral zone. I hope my point is clear; as mentioned in the beginning be on the right side.

Nifty Weekly Technical Outlook for 14 Sept’15

Please end the quandary

Last many weeks passed in a doldrums and jitters, wherein one day we were worried about China Yuan devaluation, and next day about war between South and North Korea, and now whether Fed will hike the rate or not? So finally in this week, we’ll come to know the status of Fed rate and to some extent decision of RBI will also be dependent on that.  Hope to end this quandary by this week.

To read full report you need to Register here (it’s free) and if you are already registered then there no need to register again, you’ll shortly receive newsletter.

weekly nifty outlook 14 sept'15