24 Jul ’23 Post Mortem on Nifty Bearish trend continuation
Nifty Analysis
I was quite happy to see the last 45 to 60mts of trade happening in the direction of the trend. For days unknown we used to have dip buyers who come in at 14.30 to 15.00 and then change the dynamics all together.
If you notice we had a good downtrending pattern developing on the 5mts TF. Ever since we broke down from 21st July, bears were able to form a lower low & lower high till now. Whether it replicates on the higher time frames only time will tell.
We had 3 important price actions today
1. Gap down open and then a gap-closing rally till 10.30 wherein we recovered 79pts
2. Leg1 of downfall from 10.40 to 11.55 wherein we shaved off 113pts
3. Leg2 of downfall from 14.05 to close where we lost 118pts
I was quite worried when the market started to recover from 12.00 to 14.00 - because if this swing high goes above the day’s range then I was almost sure the dip buyers will do the rest in the closing hour. Fortunately bears had a good day today, after a long long gap probably. Pushing down the prices on Nifty & Banknifty has been pretty difficult for the last 1 year!
Bearish TrendLine
Ideally the trend line should start from the point where we fell, but with the data so far it's hard to connect the dots. Once the pattern starts building up for a few more days - we will re-draw it with more accuracy.
As it stands if Nifty keeps making lower lows and lower highs then its easy for bears to push down the prices. If we negate that pattern either with a news flow or event or even a reluctance to fall - we will lose the momentum to the bulls! We will continue going short till the swing high is not violated.
I was quite happy to see the last 45 to 60mts of trade happening in the direction of the trend. For days unknown we used to have dip buyers who come in at 14.30 to 15.00 and then change the dynamics all together.
If you notice we had a good downtrending pattern developing on the 5mts TF. Ever since we broke down from 21st July, bears were able to form a lower low & lower high till now. Whether it replicates on the higher time frames only time will tell.
We had 3 important price actions today
1. Gap down open and then a gap-closing rally till 10.30 wherein we recovered 79pts
2. Leg1 of downfall from 10.40 to 11.55 wherein we shaved off 113pts
3. Leg2 of downfall from 14.05 to close where we lost 118pts
I was quite worried when the market started to recover from 12.00 to 14.00 - because if this swing high goes above the day’s range then I was almost sure the dip buyers will do the rest in the closing hour. Fortunately bears had a good day today, after a long long gap probably. Pushing down the prices on Nifty & Banknifty has been pretty difficult for the last 1 year!
Bearish TrendLine
Ideally the trend line should start from the point where we fell, but with the data so far it's hard to connect the dots. Once the pattern starts building up for a few more days - we will re-draw it with more accuracy.
As it stands if Nifty keeps making lower lows and lower highs then its easy for bears to push down the prices. If we negate that pattern either with a news flow or event or even a reluctance to fall - we will lose the momentum to the bulls! We will continue going short till the swing high is not violated.
