Nifty Outlook for Tuesday, 4th August | 50x Investments

Aug 3, 2020

Nifty - Technical Analysis:

• Nifty opened with a gap down and ended the day just above its low, forming a near perfect marubozu, which is an extremely bearish signal.
  
• On the bright side, Nifty managed to hold its 10900 lower trend line support.
  
• The index formed a near perfect wedge on 15m charts.
  
  Market - Driving Factors:
• PSU bank and Metal indices were the only 2 indices which ended the day in the green. Bank Nifty was the biggest loser, falling by over 2.6%
  
• Tata Motors gave a strong breakout and ended over 8% in the green today whereas Bandhan Bank fell over 10% following a 21% equity block deal
  
• Bearish narratives are starting to take steam on popular news media indicating that the bulls have something to worry about.
  
  Nifty - Outlook for Tuesday, 4th August:
• Trade on Tuesday will be absolutely vital given that it has the ability to potentially signal a strong bearish breakout. If Nifty breaks the lower trend line, its bad news for the bulls.
  
• On the slightly brighter side, Nifty still has some breathing space to break out. A temporary pullback and further squeeze into the wedge might be seen.
  
• Traders must be cautious and avoid taking huge directional bets on either side tomorrow morning.