prathamaggarwal
Education

WHY NIFTY GOING UP? AGAIN A GAP DOWN ON MON (15 Oct)POSSIBLE?

NSE:NIFTY   Nifty 50 Index
THIS IS THE THIRD PART OF THE ANALYSIS ON NIFTY 2.32% FALL. IF YOU NOT READ THE PREVIOUS ONE 2 POSTS, PLEASE READ THE SAME FOR BETTER UNDERSTANDING. I HAVE ALSO SHARED ITS LINK BELOW.

Last time we estimated a big downfall in the month of October and believed that IT Sector might stay in pressure as the results of Tata Elxsi disappointed and Number of TCS may also disappoint.

Although, There was no downfall today. the top companies of IT Sector behaved in the manner as expected. TCS , Mindtree , NIIT and HCL Tech ended on the negative note and other companies fell initially but recovered and ended with minor gains.

However one major thing to see is all the major global markets including Nikkei, Dow Jones, other Index were in Dark Red and even SGX NIfty was in -200 (although I do not believe SGX Nifty is directly related to Nifty but being part of the global market, even it depicts the sentiment of the market). Our Nifty did not showed any Red Colour.

FII Data suggest that they have net purchased 7.9K Index Futures and 10.2K stock Futures .

Important Event.
1. Consumer inflation stood at 3.77 per cent as against 3.69 per cent in the previous month. This rise in inflation was driven by higher prices of food and fuel along with weakness in the rupee. The retail inflation figure was lower than economists' estimates of 4% and was within the comfort zone of RBI. (Good for Market).

2. Good result of Nifty 50 Company - HUL.
3. Lined up result of Nifty 50 Company in coming week- Infy , Reliance , HeroMotoCorp, HDFC Bank

Candles Formation
The last 3 day candles have created a Bullish reversal pattern in the form of Morning Star .

Interpretation
With a rise of Today, FII has also added Longs in Shares and Indexes. We can expect a small pullback rally over here. HUL has result has been great, which will have a positive impact on the market after poor numbers from TCS . In The coming week result of top Nifty 50 companies are there, which will shape the market.

In the process to up,There has been 2 Gaps created in the past downfall and crossed 2 Fibo support (Mentioned Below) which will stop the market from going up.

Resistance 1 - Gap 1 - 10520-10550
Resistance 2 - Fibo Resistance 38.2 - 10650
Resistance 3 - Gap 2 - 10750-10850
Resistance 4 - Fibo Resistance 0.5 - 10860

The Above 4 levels are going to act as major resistance. Even after being optimistic, I do not feel market will be able to cross Resistance 3.

Please note Pullback are short term and short lived. Thus, I personally do not prefer trading the pullbacks. However these pullbacks gives good level to again short the market.
Please also note : FII even after covering have 89K Shorts. The fall can be deffer-ed but is certain to come until FII decide to cut their shorts in losses. (which never happen :P)

The last time Nifty/Bank Nifty rose 300/800 points, it witnessed a bigger Gap Down the next day. I do not expect the same on Monday. Market might open Flat.

These are just my thoughts, and my view to the things going around. I hope it Helps.

All counter views welcomed if they intend a fruitful discussion. And If Warren Buffet says he still learns, who are we to say or believe that we know all. Lets learn together and Earn together.


Thanks.
Oct 12
Comment: Note : Before anyone points out let me share. Morning Star has 3 Stages in which 1st Stage is Big Red Candle however in Nifty there was no big red candle. But since I believe Chart Patterns tell us more about the sentiment and is more of an art than science. We can have different interpretations to that.

Technically someone can call it ISLAND REVERSAL Pattern as well.
Oct 15
Comment: FII again adding shorts and closing longs. Hard day for bulls coming!
Oct 17
Comment: 2 Days they were baiting the Bulls. Infact 2 Day Positive + Gap Up today.

All washed off in 3 Hours Fall!

Hope I was able to help you guys. :)
Oct 18
Comment: Lines from the description

"The Above 4 levels are going to act as major resistance. Even after being optimistic, I do not feel market will be able to cross Resistance 3."

Nifty Preached and Didnt Breached. :)
Hello.
Morning star first candle need to be a negative followed by gap down opening. Here after a consolidation it gave a gap up opening which can nkt be counted.
This is my view
Yes if a gap up opening is seen on monday then it will be positive or else if fridays high is not crossed with gap down then lvl of 10000 is sure
Reply
prathamaggarwal rajeevrdarji
@rajeevrdarji, Hi, agreed your observation about Morning Star, I have already mentioned the same in my comments. I believe patterns are more of an art than science for we can have different interpretation. Rest, agreed with the levels you shared.

10K seems near. Upside might be limited.
Reply
Indepth analysis, helps learners like me. Lets hope the pullback is good and then we short ...
Reply
@manojkrj, thanks trader. I will continue to post such charts whenever I feel something manor coming up.
Reply
Hi Pratham da, my take is the next rally will be fuelled by 3 factors.

1. 2nd qtr results
2. Crude
3. Usd/Inr

All the 3 factors seem to be in favour as of now. Will not be surprised to see the market rally to 11000 levels before taking a breather...

Thanks,

Ravi
Reply
prathamaggarwal ravidpanjabi
@ravidpanjabi, Thanks for your inputs mate. All 3 factors you stated will have a huge impact on the market. Lets see where the market heads.

Thanks.
Reply
Too good...
Reply
prathamaggarwal bhashah1980
@bhashah1980, Thanks Trader.
Reply
Nice sir
Reply
prathamaggarwal khatalranjit5005
@khatalranjit5005, Thanks Trader.
Reply
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