ArcherDAVIS

NIFTY 50 Analysis

Short
NSE:NIFTY   Nifty 50 Index
As shown on the chart, the double top pattern has occurred 3 times in the recent few months. Each time, the market has corrected significantly.

The entire second week of February, Nifty has been moving in a tight 200 point range, with buying coming at 15000 levels and strong selling at 15,250 levels. With the current levels of volatility and narrow contracting range, I believe that the market will be looking at an expansion in the coming week/s. If the Nifty closes below the neckline (marked on the chart) this will complete the "M" pattern and will result in a downward expansion. Whereas, a closing above 15,250 will result in a continuation of the general bullish trend .

Although, I am still bullish on the Indian Markets, there is a strong chance that a downward breakout may occur.

Reasons:
- The strongest sector in the recent weeks post budget, has been the financial and Infra sector. BankNifty is stuck in the middle of the range and Friday's morning rally, did not see much follow through on the upside either.
- Large sectors like IT and Pharma have also seen a cool off and not seen much of a rally post budget either.
- Market has created a large 200 point (1.4%) gap. Gaps create space for demand in the market.

Giving due consideration to the heavy liquidity in the economy, the sentiment around the market seems to be fearful. Hence, I believe that investors are likely to book some profits and drive the market below 15,000.
If the market does give a close below 15,000, it could move towards filling the gap.

Since, the general trend remains bullish , it would not be wise to take huge short positions by putting more capital at risk.

The short trade will only be viable as long as the NIFTY CLOSES BELOW 15,000 ON THE 1 HOUR time frame. The stop loss for the view the position will then be the current high point of 15,250.

These are my personal views and I reserve the right to be wrong.

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Comment: Nifty has broken above 15,250. The bullish trend is continuing. Taking positions into 15,300 CE.
Comment: The gap got filled.

Comments

Great analysis same view I have posted on you tube.
+1 Reply
great great analysis .......:)
Reply
I have bank nifty 36000 pe, what should I do
Now I. Am in loss
Reply
ArcherDAVIS himanshuvcm
@himanshuvcm, keep a stop loss above 36500 on spot as that is the bullish breakout level.
Reply
I have sell nifty50
Sell price is 15100
Can I hold position with sell?
Reply
ArcherDAVIS Ankita2211
@Ankita2211, you can keep a stop loss above 15,250.
Reply
Ankita2211 ArcherDAVIS
@ArcherDAVIS, target?
Reply
ArcherDAVIS Ankita2211
@Ankita2211, target 1 will be 14,750
Reply
If you think Gap has to be filled, go count how many gaps are there since 11600 till 14000 since OCT
Reply
@Kakerot, I don't think it HAS to be filled, but there is a chance it may happen if the market is to start moving lower. There was another 150 point gap made on 8th Feb, which was filled in the last week itself. That did not happen in October/November.
Reply
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