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Nifty Daily

27 Jul 2020 ‚óŹ 08:12 AM





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  11400 11056-87

Nifty spent a fourth day in the same trading range and the momentum indicator is once again swinging back and forth from buy to sell. What has worked better was using the 20 DMA is a broad trailing level for the market. The last 4 days support is near 11,056, holding which we should have ended minor wave ii and minor wave iii should start on the way up. The 20 DMA is at 10,813. The 78% retracement Mark is at 11,400.


Prices have remained in a narrow range between 11,087 and 11,220 inside a slightly downward slanting channel. A breakout would set the next move. Prices are trading above the gap left behind between 11,037 and 11,056 which is acting as a support. Once we breakout on the upside we can be draw a fresh channel to get new levels of risk and reward.


The swing is back at 15 for a third time since June. We have seen this pullback each time the market has gone through 3 to 4 day consolidation period. Subsequently each time prices have moved higher so far. We will watch if the same pattern repeats again in the next few days.


  BANK NIFTY        
 TIME TREND  Up Level   Down Level
 Short term trend Down  22191  21138

Bank nifty remains the most volatile and the weak link of the market. Even when the nifty does nothing it tends to decline 1 to 3%. Doing so the index has remained an under performer since March. My long term sense is that banking as a sector will remain behind the rest of the market despite its short-term volatility. Banks will remain an un-favored investment for another year or two because they carry the burden of the past and present crisis. In the short-term bank nifty closed below the 20 DMA at 22,191 and may go down to the lower Bollinger band at 21,138 before recovering. I cannot rule out that it gets weaker than that so wait and see where support kicks in.


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