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Nifty Daily

15 Jan 2021 ‚óŹ 02:02 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  14850 14350

The decline in nifty brought the RSI back to 70.8, meaningfully down from the overbought condition it had reached , creating room for wave v of 5 to complete. We should head back above 14653. The overbought reading was keeping the market from making a meaningful move higher. Even though today's decline has pushed the daily momentum to cross over to the sell side it could be an aberration. The hourly chart shows a simple ABC correction down to 14,350, enters a support for is we have room to complete wave v of 5 on the upside. The only thing to remember is that iii was shorter than i and therefore v will be the shortest. This will keep it from going above 15,000. The last move up could be a sharp 2/3 day spike. It may also result in a negative divergence at the RSI indicator where wave 5 completes. It would require a move beyond 15,000 to change to an alternate more bullish wave count for further extensions.

Nifty broke the rising channel from the 13,200 low,however, because today's decline is corrective in nature so far and also in falling channel it may not amount to a trend reversal you will need to watch the lower end at 14,357 and the channel low at 14,390. If these hold we should attempt to break out of the channel above 14,592 and head towards a newly drawn upward slanting channel towards 14,850

The negative divergence in the swing and the high RSI together may be responsible for today's decline but it was much needed. Now the swing at 15 is in the initial oversold zone from where many times we have immediately bounced back in the past. 

  BANK NIFTY        
 TIME TREND  Up Level   Down Level
 Short term trend Up  35000 32100-32014

Unlike Nifty, Bank nifty is only at 74 RSI reading and not that overbought. The wave structure shows either a truncated 5 wave pattern coming to an end, or multiple extensions about to explode on the upside. Either a break below 32,221 should lead to weakness or we should see higher highs above today's high of 32,719 in the trend towards 35,000

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