Nifty - A short study using the various indicators

Let's analyze the charts using different indicators that are commonly used so as to see what the different traders are looking at.

Daily time frame


1. The RSI still has a potential for further selling. We are near the oversold territory.
2. There is no prominent support on the daily time frame until 15900-16000.
3. The 200 MA cluster is near 16100, which almost overlaps with the horizontal support at 16000.
4. So, it is safe to assume that 16000 should act as good support on the daily time frame.

4 hours time frame


1. Let's start with RSI and MACD. Both the indicators are showing that the price has been in the oversold region and there is still a good selling pressure.
2. There has been a confirmed breakdown of 17429 level, which was an important level since September.
3. An unfilled gap is present at 16764-16722. For those who don't know, gaps act as areas of support and resistance. Hence, it's highly likely that we fill this gap in the coming days.


4. There is an untested monthly pivot at 16700.


5. The price has closed below the 200 MA cluster. We may expect only 2 things:
i> Either the trend has reversed and the market wants to go down.
ii> Or the price is just hunting for liquidity at obvious levels and taking out the retail longs from the market.

I am more inclined towards the 2nd case. We may hunt a bit more (about 2-3%) so that the bearish narrative is set, before resuming the uptrend. A weak support level is also available near 16350, which has been tested only once.

Hourly time frame


1. Hourly time frame plays an important role since it is used by the swing traders for entry/exit.
2. There is a bullish divergence which may provide a dead cat bounce.
3. If there is a relief rally, then we may push till 17300-17400, before selling again.
4. This relief rally will be to trap the breakout longs along the trendline and to grab liquidity.

TPO chart
(Unavailable on Tradingview. If you want to see TPO chart of this post, check the PDF link under this post)

If we look at the TPO chart on the daily time frame, we can notice the following things:
1. A single print between 16900-16740, which is expected to be filled.
2. An untested value area high from August near 16690, which may act as a support.
3. POC of August at 16337, which is expected to act as a support.
4. A prominent POC at 15757, which has a very high probability to act as a support.

In simple words, we have plenty of interest zones from 16900-16300 that may act as support. But we cannot pinpoint the exact reversal point.

Volume Profile (June-Present):


1. On the downside, the nearest high-volume node lies at 16600. The other high volume node lies at 16200.
2. On the upside, the nearest high volume node lies at 17400, which was already taken out.
3. The POC lies at about 15800, where a massive volume was traded. This should act as very strong support.

Conclusion:
In my humble opinion, we have plenty of supports from 16000-16500 as per different indicators/factors. It would be good if we sell-off till these levels so the market can find the bottom faster.

P.S: Take this post with a pinch of salt. This is just my opinion and what I am able to conclude using my limited knowledge. You are free to do your own research. Also, if anyone is interested in getting a PDF version of this thread along with all the charts, then you can check the links under this post.

Disclaimer: This is NOT investment advice. This post is meant for learning purposes only. Invest your capital at your own risk.

Happy learning. Cheers!
Rajat Kumar Singh (@johntradingwick)