Good evening, traders! I hope everybody is doing great and making use of this quarantine by learning new skills. This post is about my view on NIFTY. This post is pretty long than it should've been, but I am pretty sure you will gain valuable insights from this post. Do give it a read.
I have an experience of about 1.5 years in the financial markets and I have been tracking the Indian markets since July, 2019. So as you guys know, the markets are at a very tough phase right now where there is a lot of fear and uncertainty, with India VIX reaching a record high of over 86.6 in March 2020, and even right now it is at a pretty high level of 45.19 In this post I am sharing my view on NIFTY 50 on where is it headed in the coming weeks. When the markets were at 12200-12300 levels, my view was heavily bearish on the markets and I saw a drop of about 1500-1800 points considering the levels in the chart as well as the overvalued markets which was clearly indicated by its fundamentals with PE ratio of SENSEX reaching at record high levels.
I couldn't post back then but today I finally decided to share the analysis with everyone. What happened in past happened, but now is the time when I felt like I should share my ideas with everyone. I have 100% rights to be wrong.
The markets have corrected upto 9390 level from the March 2020 low of 7511, over 25%. According to my analysis, I feel like the correction is over now and in the coming months we will see a new low in the markets which can very easily align with 6400 zone, which was the high of 2008, right before the financial crisis begin. I wouldn't be surprised to see 6400-6300 levels pretty soon, before the markets actually get back to normal.
In the above chart, you can see the important levels to observe: (9300-9390 as a strong resistance right now, with immediate support at sub 9k levels which NIFTY reached yesterday i.e. on 21st April, 2020) Now that NIFTY has broken 9000 level, we can expect decent short-sell setups in the next few days or even weeks and as you can check on Option Chain too that huge call writing has been witnessed at 9000 level with adding over 1.2 million new contracts today.
Now the next level to watch out would be 8845-8820. If this level breaks, which I believe it will today i.e. 22nd April, 2020, then we can see NIFTY flocking towards 8700 levels pretty soon, then 8200. And then 8000, being an important psychological level would be very crucial to watch. After that sub 7.5k level would be very very important to watch and if that breaks, markets will further weaken even more and I won't be surprised to see NIFTY at 6400-6800 levels in the coming month.
That's my overall view on NIFTY and on the markets as a whole. I would be sharing smaller time frame charts and analysis on that pretty soon so that you guys can see the market structure much more clearly.
I hope you guys have gained something valuable out of this post. I would really appreciate if you take some time out to comment your view on the markets, or if you liked my analysis and learned something out of it. And please do let me know whereever I was wrong. I would love to have suggestions. Happy Trading, Folks!
Your prediction seems to be quite rational and in accordance with what happened in past falls or crashes of the market.... but main problem is when it will happen? Time cycle dates are not easy to predict if u can do that........ regards dkbhalla
Anshul_Verma
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@D_Bhalla, You're right. It matters a lot as to how long the markets will take to fall. Our job as traders is to take sniper entries when they actually present themselves. Never chase the price. Let it come to you always. By the way, I'll definitely remember to update that in my next post. Thanks for bringing that to my notice.
sunyuva
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I really welcome the People , who is posting nifty views. Because this is very helpful for non technical people trading in the market.
Anshul_Verma
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@sunyuva, I am glad you found it useful. Thanks for giving your views on my post. I'll be posting smaller time frame analysis too, both of NIFTY and BANKNIFTY. Do follow up for the updates!
sunyuva
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I bought Nifty 7500 PE -June Expiry. Kindly Guide me. What is the time frame for nifty to reach 6444. What is the present trend of market. Whether it will reach 10000 or not. When the pullback rally will be terminated.
r.sasiganapathy
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Nice Analysis ,But Corona effect on Global indexes may fade as Corona Fades and Slowly Economic Back on Action ,So crashing Possibilities below 7500 Seems to be Tough
Anshul_Verma
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@r.sasiganapathy, Agreed. 7500 is pretty tough to break as of now. But as soon as fear kicks in, market breaks all its important levels too. As you might have seen in the past as well, markets do correct quite a lot after a sudden huge crash. Same is happening right now too. Now is definitely not the best time to invest.
Current market scenario can be best compared with 1929 market crash. You can go back and look at the charts, you'll be amazed to find almost the same pattern :)
blitz1989
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@r.sasiganapathy, - the next fall won't be coz of corona. The corona fall is done. The next fall will be because of economic and financial crisis
Anshul_Verma
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@blitz1989, COVID-19 already has created a disastrous effect on the markets and the global economy as well. Markets are just in correction phase right now. Next big move will come, but as you pointed out it won't be the same panic sell as it was in March 2020 when the virus got spread all over the world at a much larger scale.