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Nifty Daily

7 Jul 2020 ‚óŹ 02:11 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 10689-10540

Nifty managed to hold its gains into the end of the day and closed very near the opening level, that is called a doji star in candlestick patterns, a sign of a indecisive market that is losing momentum. Therefore today's high of 10,814 becomes important, at the same time today's low of 10,689 when broken would set up a near term correction back to 10,546 or below that towards 10,300. The inter market divergences that I discussed in the last 2 days have gone away as bank nifty also managed to close higher than its June high today. We are in minor wave v of this move and need to be alert to the possibility of a reversal with the trailing level in mind. I am putting today's support level at 10,689, as a move below it would be the 1st sign of further weakness short-term.


Nifty bounced right out of the wedge pattern and needs to sustain above 10,744 this breakout to be real. Holding above it the parallel channel stretches all the way to above 11,000. On the other hand failure to sustain could result in a correction back to 10,540 or below that towards 10,250.


The advance decline ratio was mildly negative but sufficient to move the swing lower to 62 [from 76 yesterday]. This leaves open a negative divergence of the swing with price at the highs within the wedge, where the swing is making lower highs when the nifty makes higher highs. A price confirmation is still needed from Nifty falling itself. The MidCap index below shows a 5 wave advance. The 4th wave is a clear triangle. Triangles precede final moves, in this case the 5th wave. Once wave 5 completes we should see a pullback of some degree. So till this 5th wave goes on we have upside near term is a good way to think.


  BANK NIFTY        
 TIME TREND  Up Level   Down Level
 Short term trend  Up 23100   22000-21341 

Bank nifty managed to go past its June high nullifying the negative divergence with nifty and pushing the daily momentum to the buy side. The momentum reading itself is lower than where it was in June and if bank nifty does pause we will get a negative divergence at this level. Despite this move I would still wait for a breakout beyond the trendline of the highs near 23,060 before confirming that a new wave up has started. The wedding structure which is overlapping looks corrective and could still result in wave 2 correction before another rally and bank nifty. Tomorrow may provide more evidence of what lies next. A move below 22,000 would signal the possibility of deeper correction back to 21,341 or all the way back to 20,000.


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