21 Sep ’23 Post Mortem on Nifty - 19589 has to be taken out 22nd

NSE:NIFTY   Nifty 50 Index
Nifty Weekly Analysis
Nifty has fallen 354pts ~ 1.76% between the last expiry and today. Interestingly the price action on 15th and 18th stands out as an isolated island. Almost 90% of the fall came in the last 2 days which has even changed the sentiment.

Nifty Today’s Analysis
Recap from yesterday: “For further down move we need that gap to be taken out on the downside just like how it was taken out on the upside. Only then the bears can bring the panic in the markets. Which translates into a 70pts+ gap down opening tomorrow. My stance has been changed from neutral to bearish with the first target 19815 and then 19747. If Nifty50 is unable to fall below 19895 in the morning session — I will have to change my stance back to neutral.”

Everyday I write down the next day’s levels, targeted open, close etc - but never have I got it 100% right in the last many years. We had gap-down open and the encircled regions shows how the gaps were recreated on the downside just like we had it on the upside.

Isolated islands are usually created when there are changes in sentiments overnight. Yesterday we had the FOMC meeting in the US and they decided to keep the interest rate as it is - source. What really unnerved the markets is their decision not to cut the rates till they win the battle against inflation. Ideally that is a negative global macro - and guess what our markets performed better than asian peers in spite of these news.
You are already aware India - Canada tensions are rising and there was news about Halting Canadian Visa services. Still we fell only 0.8% ~ 159pts today.

Japan fell -1.22%, China fell -1.24%, Hong Kong fell -1.45%, South Korea fell -1.75%. Our markets are in a different orbit of its own.

On the 1hr chart - the weakness is visible - but the bears have not gained enough momentum. There is still no panic - VIX fell -2.79% @ 10.8175. Today’s price move is summarised in the first hourly candle - because the next 6 candles have not moved the needle by an inch. I am starting to doubt if the bulls have priced in all the information available?
For tomorrow, I wish to maintain the bearish stance with the first target at 19672 and the second but strong target at 19589. Ideally the bears should be able to close the day below 19589 tomorrow and take out the 19310 early next week. One thing to remember is Nifty50 is still not bearish on the daily time frame whereas SPX is.


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