18th Oct ’23 - Vertical fall from a strong zone - PostMortem N50
Nifty Analysis
Recap from yesterday: “On the 1hr TF, we have formed an island just above the 19776 levels. Today’s swing high has taken out the highs of 12th October. I wish to continue with my bullish stance as long as the support of 19776 is respected. Ideally, the next target should be 19907 and then 19998 if we are going up.
Not sure why, but our markets are looking bullish despite a war in the Middle East, surging gold, surging crude oil, and surging treasury yields in the US. Why are Indian stock indices insulated from these multi-headed shocks? Either the fundamentals are not bad or the technicals (charts) have not priced in these anomalies. As a technical trader, the only option for me is to follow the charts even while knowing something’s off. India VIX @ 10.69, US VIX @ 17.88”
The pre-open did not show any indication for the day that followed, even the open was inline. The first candle was quite strong in RED, but it bounced off the support line of 19776. By 10.05 we were back to 19840 levels and looking strong. Even though the 19700 PEs were trading in the cheap 20 to 22 range - I was not interested in buying thinking it would go worthless. What followed was totally uncalled for. We started falling quite brutally, the support was taken out by 10.50, the intensity really picked up and we hit an interim bottom at 12.30 ~ 19674 levels. As we discussed yesterday, the charts did not indicate this movement - it looked pretty bullish to me. What happened today was that my long position went into loss and then I had to go short to go with the trend.
The second leg of the fall took out 65pts ~ 0.33% after we climbed to the 19720 levels. The 2nd leg was stalled by time - else we could have seen more action.
On the 1hr TF, I wish to change my stance from bullish to neutral but with a bearish bias. The rationale being the intensity of the 10.15 candle that cut through the support. That candle looks purposefully planted to bring a bearish bias. If we start moving downwards tomorrow, my first target will be 19600 followed by 19529. In case we reverse, the first step would be to take out the resistance of 19776.
Recap from yesterday: “On the 1hr TF, we have formed an island just above the 19776 levels. Today’s swing high has taken out the highs of 12th October. I wish to continue with my bullish stance as long as the support of 19776 is respected. Ideally, the next target should be 19907 and then 19998 if we are going up.
Not sure why, but our markets are looking bullish despite a war in the Middle East, surging gold, surging crude oil, and surging treasury yields in the US. Why are Indian stock indices insulated from these multi-headed shocks? Either the fundamentals are not bad or the technicals (charts) have not priced in these anomalies. As a technical trader, the only option for me is to follow the charts even while knowing something’s off. India VIX @ 10.69, US VIX @ 17.88”
The pre-open did not show any indication for the day that followed, even the open was inline. The first candle was quite strong in RED, but it bounced off the support line of 19776. By 10.05 we were back to 19840 levels and looking strong. Even though the 19700 PEs were trading in the cheap 20 to 22 range - I was not interested in buying thinking it would go worthless. What followed was totally uncalled for. We started falling quite brutally, the support was taken out by 10.50, the intensity really picked up and we hit an interim bottom at 12.30 ~ 19674 levels. As we discussed yesterday, the charts did not indicate this movement - it looked pretty bullish to me. What happened today was that my long position went into loss and then I had to go short to go with the trend.
The second leg of the fall took out 65pts ~ 0.33% after we climbed to the 19720 levels. The 2nd leg was stalled by time - else we could have seen more action.
On the 1hr TF, I wish to change my stance from bullish to neutral but with a bearish bias. The rationale being the intensity of the 10.15 candle that cut through the support. That candle looks purposefully planted to bring a bearish bias. If we start moving downwards tomorrow, my first target will be 19600 followed by 19529. In case we reverse, the first step would be to take out the resistance of 19776.
