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Nifty Daily

3 Jul 2020 ‚óŹ 01:51 PM





Position Sizing model - Long % = percentage of indicators bullish v/s Short % = number of indicators bearish, Including both daily and weekly time frames.

 TIME TREND Up Level   Down Level
 Short term trend  Up 10671-11200 10205

Even though the nifty close higher the day's candle ended up being a doji with the negative real body, which means that we opened higher than where we closed, and the difference between the opening and closing is very little. These are typical signs of a loss and momentum till the high get surpassed. In this case the trendline of the last 2 highs at 10,680 would be the main resistance. The failure to break out of the wedge formation would mean that we are still consolidating in wave 2. The failure of bank nifty and MidCap and indices to confirm the higher high in nifty is a short-term inter market divergence that once of up possible near-term pullback. The only thing to figure out this whether it would be a small dip to 10,400 or a retest of the 20 DMA at 10,200. Be open to this till these divergences are in place. The entire structure from the June highs has a rising triangle or wedge like formation, very similar to that seen in April. 


Yesterday I discussed the very small trendline from the 10,267 below where the triangle ended. Prices have moved sideways out of that trendline and also did not touch the upper line near 10,700. Failure to surpassed the upper line would bring prices back down towards the lower trendline of the wedge like formation near 10,470. If that 2 breaks then the rising trendline from the March bottom would come at 10,260. A breakout above 10,700 however would amount to an extension towards the 11,000 Mark.


The swing came off to 52 and could develop into a negative divergence if prices also decline.


  BANK NIFTY        
 TIME TREND  Up Level   Down Level
 Short term trend  Up 24800   21154

Bank nifty did not go above the June high of 22,479 and its daily momentum remains in sell mode thus creating a divergence with the nifty. Unless we go higher it keeps open the possibility that prices will retest the 20 DMA 21,154, and if that breaks then the reverse parallel channel is the major support at 20,227. What we are saying is if prices do not continue higher we are still in wave 2 consolidation phase.


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