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Nifty Daily

6 Jul 2020 ‚óŹ 12:08 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  11200 10720-10530

Just as everything is playing out as expected, today the narrative is that most markets are up because of a falling dollar, what I'm paying attention to is the short-term technicals. The failure of bank nifty to surpassed the June high even today leaves open the inter market divergence between these two indices. We saw an exhaustion gap in the month of April when prices surpassed the trendline of the last 2 highs and we then got a correction from that wedging structure. A similar setup is developed over the last one month and we have surpassed the upper trendline with a gap up. Is this an exhaustion gap? I will consider it given the inter market divergence and watch for short-term risk over the next 2 days. The RSI has now closed at 71, just above the overbought zone, but to early to conclude anything. A move below 10720 should be a warning of a possible pullback. Last but not the least the discount of 30 points seen in Nifty midday went down to 3-7 points on the close. Did bears capitulate or FOMO bulls jump in finally? It fits the case of an exhaustion gap.


The trendline of the last 2 highs is a rising line and is close to 10,720 as of now. Any move below this would mean that the breakout failed in the short-term and could result in filling the gap down to 10,630 or a retest of the trendline of the last 2 lows that is that 10,530. Holding above 10,720 the move up may extend.


The swing at 77 as rising and another day up to take it above the 80 Mark making it slightly overbought. On the other hand if it makes a lower high then 83 that would be a divergence from its June high.


  BANK NIFTY        
 TIME TREND  Up Level   Down Level
 Short term trend  Up 23000    21246-20300

Remaining below the trendline of the last 2 highs at 23,000 and the previous high of 22,479, the daily momentum indicator remains in sell mode and odds remain open that we are still consolidating in wave 2. The failure to breakout higher would result in the pullback to the 20 day moving average at 21,246, and if that breaks to the reverse parallel channel line at 20,300.


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