NIFTY Market Insights: Anticipating significant shifts
Updated
Dear Traders,
I trust this message finds you well in both your trading endeavors and personal pursuits. I am pleased to present a compelling opportunity through a new NIFTY analysis that indicates an imminent significant market shift. The recent upward surge in the market has prompted concerns, as my analysis over the past two months has consistently pointed to an anticipated correction owing to market overvaluation and distinct completion patterns.
Technical details:
I. Resistance I: 25,388 ~ 25,430 (Extended trend line from 17th JUN'22)
II. Resistance II: 25,490 ~ 25,510 ~ 25,526 (Conj. Extended trend line from 24 JAN'24 & 24 JUN'24)
III. Resistance III: 25,590 (Extended trend line from 29 FEB'16 – Long & strong Resistance)
Please note that these values serve as indicative levels of support and resistance.
The wave patterns depicted in the diagram, signal completion of the trend.
Additional observations:
Time series Forecasting:
Top - Top
- Today (04/09/2024) = 1690 D from 20jan'20 (1710 = 360*4 + 270)
= 1053 D from 19oct'21 (1080 = 360*3)
= 644 D from 01dec'22 (630 = 360+270)
= 356 D from 15sept'23 (~360)
Bottom – Top
- Today (04/09/24) = 1626 D from 24mar'20 (1620 = 4*360+180)
= 811 D from 17jun'22 (810 = 720 + 90)
= 315 D from 26oct'23 (exactly an important angle)
= 535 D from 20mar'23 (540 = 360 + 180)
Given these short and long-term observations, the time resistance(s) are notably robust.
Historical Repetition:
The ongoing 14-day winning streak, continuously setting new records, typically precedes short-term corrections ranging from 3% to 24%, as historically observed. For instance, in May 2006, Nifty’s non-stop 9-day rally culminated in a 24% index decline in the subsequent month, while a similar trend in February 2000 resulted in an 11% decline in the subsequent month.
Consequently, a market breather is anticipated, with profit booking potentially driving the market to deeper levels before embarking on a new uptrend (anticipated correction in the monthly scale, evident in the 3M time frame). Further details will be provided as the market unfolds.
A correction of this magnitude is expected to materialize, with the following scenarios:
The initial focus is to prioritize the trend line-based correction scenario. The primary support levels are identified at 23,100. Any subsequent breakout will result in distinct scenarios.
Scenario 1: From 15,183.40, retracement towards 21,500 = 4,000 pts (38.2%R) (-12 to 15%), highly probable given the aforementioned reasons.
Scenario 2: From 16,828, retracement towards 21,100 levels = 4,400 pts (50%R) (-13% to 17%), also plausible within the realm of reality.
One of these scenarios is poised to unfold as the market progresses into correction.
Fed and Markets:
Considering the correlation between interest rates and market fluctuations, it is wise to take them into account. Typically, their relationship is inversely proportional. However, the Fed has been delaying the easing process due to economic conditions such as employment and inflation data. This month may bring many surprises.
If everything goes according to plan, interest rates will be reduced, theoretically boosting investment in gold and stock markets. On the other hand, if the dovishness in the rate decision continues, it will likely unsettle the markets, at least in the short term.
Further data releases this month will help in forming a consensus.
IMPORTANT DATES TO REMEMBER!!!
Sept - 5, 6, 11, 12, 18 (FOMC)
Strategy:
1. Being bullish beyond this point is not recommended.
2. Bearish bets are prudent from 25, 300 – 350, 400 for FOMO traders.
Risky traders may consider waiting for the 25,500 levels to be tested.
Disclaimer:
Before concluding, I must underscore that the insights shared are based on my analysis. It is imperative for you to conduct your research and, if necessary, consult with a financial advisor before making any trading decisions. The dynamic nature of financial markets necessitates that your strategies align with your financial goals and risk tolerance.
Your feedback is genuinely appreciated, and I would encourage you to share your thoughts in the comments section. I am committed to engaging with each response.
Fellow Traders,
Countless hours of dedication and effort have gone into creating this valuable analytical resource. If you find it useful, I humbly ask for your support by liking and following me. Your comments and thoughts on this idea are highly valued, and I am committed to engaging with each one personally.
Thank you for investing your time in reading this article,
Your readership is greatly appreciated.
Wishing you profitable and joyful trading!!!
I trust this message finds you well in both your trading endeavors and personal pursuits. I am pleased to present a compelling opportunity through a new NIFTY analysis that indicates an imminent significant market shift. The recent upward surge in the market has prompted concerns, as my analysis over the past two months has consistently pointed to an anticipated correction owing to market overvaluation and distinct completion patterns.
Technical details:
I. Resistance I: 25,388 ~ 25,430 (Extended trend line from 17th JUN'22)
II. Resistance II: 25,490 ~ 25,510 ~ 25,526 (Conj. Extended trend line from 24 JAN'24 & 24 JUN'24)
III. Resistance III: 25,590 (Extended trend line from 29 FEB'16 – Long & strong Resistance)
Please note that these values serve as indicative levels of support and resistance.
The wave patterns depicted in the diagram, signal completion of the trend.
Additional observations:
Time series Forecasting:
Top - Top
- Today (04/09/2024) = 1690 D from 20jan'20 (1710 = 360*4 + 270)
= 1053 D from 19oct'21 (1080 = 360*3)
= 644 D from 01dec'22 (630 = 360+270)
= 356 D from 15sept'23 (~360)
Bottom – Top
- Today (04/09/24) = 1626 D from 24mar'20 (1620 = 4*360+180)
= 811 D from 17jun'22 (810 = 720 + 90)
= 315 D from 26oct'23 (exactly an important angle)
= 535 D from 20mar'23 (540 = 360 + 180)
Given these short and long-term observations, the time resistance(s) are notably robust.
Historical Repetition:
The ongoing 14-day winning streak, continuously setting new records, typically precedes short-term corrections ranging from 3% to 24%, as historically observed. For instance, in May 2006, Nifty’s non-stop 9-day rally culminated in a 24% index decline in the subsequent month, while a similar trend in February 2000 resulted in an 11% decline in the subsequent month.
Consequently, a market breather is anticipated, with profit booking potentially driving the market to deeper levels before embarking on a new uptrend (anticipated correction in the monthly scale, evident in the 3M time frame). Further details will be provided as the market unfolds.
A correction of this magnitude is expected to materialize, with the following scenarios:
The initial focus is to prioritize the trend line-based correction scenario. The primary support levels are identified at 23,100. Any subsequent breakout will result in distinct scenarios.
Scenario 1: From 15,183.40, retracement towards 21,500 = 4,000 pts (38.2%R) (-12 to 15%), highly probable given the aforementioned reasons.
Scenario 2: From 16,828, retracement towards 21,100 levels = 4,400 pts (50%R) (-13% to 17%), also plausible within the realm of reality.
One of these scenarios is poised to unfold as the market progresses into correction.
Fed and Markets:
Considering the correlation between interest rates and market fluctuations, it is wise to take them into account. Typically, their relationship is inversely proportional. However, the Fed has been delaying the easing process due to economic conditions such as employment and inflation data. This month may bring many surprises.
If everything goes according to plan, interest rates will be reduced, theoretically boosting investment in gold and stock markets. On the other hand, if the dovishness in the rate decision continues, it will likely unsettle the markets, at least in the short term.
Further data releases this month will help in forming a consensus.
IMPORTANT DATES TO REMEMBER!!!
Sept - 5, 6, 11, 12, 18 (FOMC)
Strategy:
1. Being bullish beyond this point is not recommended.
2. Bearish bets are prudent from 25, 300 – 350, 400 for FOMO traders.
Risky traders may consider waiting for the 25,500 levels to be tested.
Disclaimer:
Before concluding, I must underscore that the insights shared are based on my analysis. It is imperative for you to conduct your research and, if necessary, consult with a financial advisor before making any trading decisions. The dynamic nature of financial markets necessitates that your strategies align with your financial goals and risk tolerance.
Your feedback is genuinely appreciated, and I would encourage you to share your thoughts in the comments section. I am committed to engaging with each response.
Fellow Traders,
Countless hours of dedication and effort have gone into creating this valuable analytical resource. If you find it useful, I humbly ask for your support by liking and following me. Your comments and thoughts on this idea are highly valued, and I am committed to engaging with each one personally.
Thank you for investing your time in reading this article,
Your readership is greatly appreciated.
Wishing you profitable and joyful trading!!!
Comment
The duration of the expected correction will be 2-3months & will be reflected only up to 3M charts & not on 6M or higher (past relevant correction lasted 16 weeks - 11 waves - 4 months)Comment
Today's fall is not a part of the above mentioned analysis, The trade is not active - wait for the levels mentioned
Comment
As expected the US data's were disappointing, so it can be expected for the FED to be dovishComment
This also supports our analytical strategy, a fall is inevitable but for that the levels of 25500 has to be taken out before sept 18th(FOMC).Comment
The no.of days from 20MAR'23 is ~540 D(360+180). The more the time is squeezed, the more the vigor.Comment
Next wave (in Daily) is probably the final move in the sequence, watch out for 25,495~25,515 levels (For a potential reversal).
However, Fed @ sept18 may extend this final move to some additional 3 - 4 days(aiming higher levels aforementioned).
Comment
Depending upon FOMC, the market may test 25,590 ~ 25,660 before reversal (I personally expect 25 bps cut & this warrants the stated action, only if market sees it as apt) before the correction,
However, GIFT NIFTY Exhibits a stronger weakness in daily charts! ( & this says otherwise).
Trade cautiously.
Verdict: opening sell positions @ 25,500 secures the trade (with marginal risk involved)
Comment
FED's overwhelming move of 50bps cut can only lift the market in short term. However the specified levels still hold their significance..
Brace for 25,500 (1st resistance & 25,600 as it is surpassed)
Therefore, any upward momentum at this juncture will only be considered a trap & not an opportunity(given the over-valuation, patternal & time completion).
Comment
Today can be final move in the sequence - The correction at this point is inevitable(however there are three possibilities of correction which can be decoded as the market progresses further into the correction.
watch out for 25,700 levels for short entry!!!
once the levels are breached the label will be set to TRADE ACTIVE....
Trade active
Entry @ 25,690~700 for short positions
Best Regards,
WDG_Dinesh_Gengarajan
Full-Time Analyst, Trader & Trainer
For learning, visit Wiz-Brains Online Trading Academy
Unlock free courses and face the markets with confidence! @ wiz.leadbrains.com
WDG_Dinesh_Gengarajan
Full-Time Analyst, Trader & Trainer
For learning, visit Wiz-Brains Online Trading Academy
Unlock free courses and face the markets with confidence! @ wiz.leadbrains.com
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