25 Aug ’23 Post Mortem on Nifty - reversal in trend, below wedge
For the last two days both my predictions have gone wrong. On 23rd Aug I recommended a long but we closed in negative territory. On 24th I recommended a neutral stance, but we went deep red today. On both the occasions, I had mentioned the rationale on why I have taken that decision and how I may react if the market makes a different move.
Today we opened gap down right at the support/resistance zone of 19310 and went down quite strongly in the first candle. From there Nifty made 2 attempts to breach this SR and go up - but failed. We woke up to bad news from the US that FED & its commitment to bring inflation to the 2% band.
What this did to our markets is bring about a reversal in trend. Just the previous day we had a breakout from a falling wedge pattern and Nifty was breaking free to take out the 19700 levels - but this cut short.
This is what I said in yesterday’s report “For tomorrow I wish to change my stance from bullish to bearish. If we trade above the trend line for more than an hour - I wish to go long. And if we fall below 19310 - I wish to go short. Till then prefer to stay neutral.” I took the short position right at the open as my short criteria met. But the position is still not so profitable as the market did not fall further. I was hoping for more than a 1%+ fall today.
I have made a modification to the 1hr TF. The newest addition is the bottom trend line which is almost parallel to the top bearish line. The reason to bring this up is to find out what will happen since the support was breached. Since Nifty was respecting the bottom trend line on 4 previous occasions, I expect it to comply going forward also.
For Monday 28th Aug I wish to change stance from neutral to bearish with a stop loss just above 19310 if it stays there more than an hour. My next strong support comes at 18880 which means the fall could be quite deep.
Today we opened gap down right at the support/resistance zone of 19310 and went down quite strongly in the first candle. From there Nifty made 2 attempts to breach this SR and go up - but failed. We woke up to bad news from the US that FED & its commitment to bring inflation to the 2% band.
What this did to our markets is bring about a reversal in trend. Just the previous day we had a breakout from a falling wedge pattern and Nifty was breaking free to take out the 19700 levels - but this cut short.
This is what I said in yesterday’s report “For tomorrow I wish to change my stance from bullish to bearish. If we trade above the trend line for more than an hour - I wish to go long. And if we fall below 19310 - I wish to go short. Till then prefer to stay neutral.” I took the short position right at the open as my short criteria met. But the position is still not so profitable as the market did not fall further. I was hoping for more than a 1%+ fall today.
I have made a modification to the 1hr TF. The newest addition is the bottom trend line which is almost parallel to the top bearish line. The reason to bring this up is to find out what will happen since the support was breached. Since Nifty was respecting the bottom trend line on 4 previous occasions, I expect it to comply going forward also.
For Monday 28th Aug I wish to change stance from neutral to bearish with a stop loss just above 19310 if it stays there more than an hour. My next strong support comes at 18880 which means the fall could be quite deep.
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