Beginning of Reversal from Short Term Up Trend Or Just Breather at Resistance : NIFTY-50 View

Beginning of Reversal from Short Term Up Trend Or Just Breather at Resistance : NIFTY-50 View

In our past week updates, we have been constantly saying that to trade successfully first you need to understand what type of market you are in, like bullish uptrend, bearish downtrend, or sideways and so on. Suppose, we are in a sideways/pullback kind of market, then we need to decide how to trade it. There are different approaches and styles to trade these different types of markets. Many traders trade only one type of market and stay away in other types of market, while some all-season traders or ‘every-day’ traders trade in all type of markets.

Anyways, lets come to market analysis, we yesterday market could give gap up above 11000 points nifty-50 index, but yesterday itself it kind of touched that level, and came off later on. However the index didn’t closed in DOJI pattern, but opened gap down/lower today morning which makes it vulnerable to making a very reliable evening star pattern which could either send market in a good decline of 200 points of more or even reversal to its six month old downtrend or more possibly just the sideways market. We believe the later more probably.

The NIFTY 50 INDEX is right now at 10900 and a slow decline of 200 points as mentioned in one of the scenario is possible, however in that case the midcap rally and individual stock outperformance may continue as repeatedly mentioned in last many updates. Looking at the response of the markets to last many sell offs in USA markets, the ‘evening star pattern’ backed sell off and revert to the 2017H2 correction cum bear market phase does not seem a lot probably, however we should be ready with all options when one is trading in the market where best brains of the world come to make money.

Read previous posts for further references.

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NIFTY 50 INDEX – Gap up can happen 11100

NIFTY 50 INDEX – Gap up can happen 11100

The Indian stock markets have shown good resistance in respect with the defeat of the ruling BJP in three states ahead of the next year LS elections. The crude oil prices have softened, easing the burden on the central government fiscal front, the export – import balance of payment front and the economy as a whole which uses the petroleum produces at every step of commerce. The market has also been digesting all DOW JONES falls along with its Asian counterparts. There is also lack of bad macroeconomic data, result season is not going on and many macro data is coming positive. With new RBI governor appointed from goodbook of PMO has also removed the newsflow of RBI and Govt. tensions.

The market can again get into sell off move if global markets start to sell of on the back of huge panic selling and sell off in USA DOW JONES markets. However, the Indian LS Elections is not a trigger right now as it is still far away many months before that we will see a budget from the incumbent government.

The nifty 50 index can open gap up in absence of any unforeseen bad news to around 11100 which is currently at 10950 levels. If this happens then we may see further immediate upside or possible consolidation, in both cases we are bound to see the continuation of the midcap rally and individual stock specific decent upmove in frontline stocks as well. Remember, this rally is not supported by good volumes so take profits and keep mentality of getting in and out. At the same time it must be kept in mind that 10950-11000 is the short-mid term resistance level and if today it closes around the present level and makes a DOJI candlestick formation and opens gap down or goes down significanly after opening flat or up then it will make a bearish pattern right at the resistance level, then we will again fall into a sideways trade decline and possibly a follo up sell of may be on the back of the global markets fall.

For best services for traders and investors in Indian stock market for multibagger stock calls and intraday stock, nifty, stock futures, options trading calls visit our website www.meghacapital.in

To know how to trade or/and invest with enty, exit levels, alerts and time duration etc. become member.

This is only a brief analysis and not a complete research report or recommendation. Become paid member to benefit from market and individual stock moves. Become member to get alerts for buy and sell with targets. Please read complete disclosure, disclaimers on our website.