Trend Reversal - Bearish Belt Hold & Engulfing Candle stick
1. Support levels are highlighted as S1, S2 & S3
2. Heavy Selling
3. Negative News
Niftyoutlook
#Nifty Directions and levels for March 19th."Good morning, friends! Here are the directions for March 19th: there is no significant difference in the last session. The global market trend remains structurally moderately bearish, supported by the Dow Jones, while our local market sentiment also indicates a moderately bearish trend. It might open with a gap-down start, as suggested by Giftnifty, showing a -80 point.
"Nifty experienced a minor pullback in the last session. Giftnifty indicates a negative start, but structurally, it has a minor pullback continuation. So, if the market finds support around 21996 to 21961, we can expect a range market or pullback continuation. On the other hand, if it breaks the previous low, then the correction will likely continue, reaching the level of 50% Fibonacci retracement level for the downside
NIFTY Analysis for tomorrow 19 Mar 24As we have discussed in our Video, Nifty is trading at its 200 EMA in 1-H TF, which has been providing very nice support.
Important Levels: marked on chart
Support: 22050 , 21930
Resistance: 22164
Verdict: Sideways
Plan of Action:
Sell 22000 CE & PE. Exit one leg if it breaks the zone. (hedge with 20/- PE)
15 Mar ’24 — Nifty falls below the support again, goes bearish ⬇Nifty Analysis - Stance Bearish⬇️
Recap from yesterday: “If you look at the higher time frame, today’s price moves might be between 38.2 to 50% Fibonacci retracement levels and what might have formed could be a lower high.”
4mts chart
Nifty was not able to sustain the gains yesterday, within the opening 15 minutes itself it breached the support level of 22051 and stayed below that for the entire day. Since we broke the SR level, we had to change the stance from neutral to bearish today. Even though we went down, it was not accompanied by a huge momentum or an avalanche build-up. The reason is, the next support level of 21913 was not tested today.
The only reason we pushed through the resistance yesterday was because of NiftyIT. And today NiftyIT started with cuts of -0.9%. Do you agree with me now that the main villain is NiftyIT which is preventing Nifty50 for a smooth directional trend?
On the higher timeframe, looks like the lower high is formed perfectly. It has to be complemented with a new lower low. And when that happens the support of 21913 will have to give away and we might even have to retest the 21491 levels. After reading the “electoral bonds scam” and “small and mid cap stress tests” news, I strongly feel we might have uncertain times ahead, at least for a short while.
63mts chart
NIFTY Prediction for tomorrow 18 Mar 24As we have discussed in our Video, Nifty is trading at its 200 EMA in 1-H TF, which has been providing very nice support.
If we look at the chart now:
The market is trading at the support zone. Also, 22950 provided a nice bullish pullback twice today, which indicates 21950 to be a good support level for now. The market is trading in a Bearish Zone right now. So, avoid naked call buying. You will end up losing theta.
If we look at the OI data:
PCR = 0.80, which shows that the market is bullish. 22000 has heavy CE and PE writing. CE writing was significantly more than PE writing, which indicates 22000 will be providing nice resistance for now. Looking at the OI change market, it is sideways.
Looking at the FII Data, we can say the market might open a gap-down.
I am expecting the market to be sideways for 1 or 2 days.
Case 1: Sideways in the range 21950 - 22050.
Case 2: Bullish if the trendline breaks to the upside.
Reasons:
Price < EMA(13, 200) shows market is in bearish trend. Also, EMA(13) << EMA(200), which indicates the market needs some consolidation.
RSI = 48, which is 40-60, indicates the market is going to be sideways.
VWAP ≡ Price means the price is volume balanced. We can expect a move soon.
PCR = 0.80, which shows a bullish sentiment in the market. On the other hand, the 22000 level had massive CE and PE writing. 22000 is going to provide good support and resistance here.
Verdict: Sideways and Bullish.
Plan of Action:
Case 1: Sell 22000 CE & PE. Exit one leg if it breaks the zone. (hedge with 20/- PE)
Case 2: Sell 22000 PE (hedge with 20/- PE)
14 Mar ’24 — Nifty may be forming a lower high, stance neutralNifty Analysis - Stance Neutral ➡️
Recap from yesterday: “From the recent top of 48161, BN is falling, but yet to make a lower low or lower high. Unless the 2nd leg starts, we wouldn’t know with clarity what it has in mind. To go bearish, we need to fall below 46176 another 800pts away.”
4mts chart
The day did not go as planned, firstly the selling pressure came to a full stop. Secondly, the short covering helped Nifty breach the resistance of 22051. Nifty had a swing range of 287 points today and because it took out a crucial SR, we are switching the stance from bearish to neutral. I was totally not in agreement with the trades on NiftyIT, that sector alone ended up +1.98% today. The impact of Adani stocks was standing out today, a variance of 0.22% with Sensex should prove a point.
We are back to the same situation where the weak hands are holding the shorts. The first blink of green they run for cover creating a fake momentum. And then they re-enter the shorts at a lower level losing more points.
If you look at the higher time frame, today’s price moves might be between 38.2 to 50% Fibonacci retracement levels and what might have formed could be a lower high. Again we are not quite sure if the technical analysis will work tomorrow as the markets will be keenly watching for the electoral bonds data. We would like to re-enter the bearish position below 22051 and the bullish position above 22295.
63mts chart
Nifty Analysis for tomorrow Expiry | 14 March 24As we have discussed, NIFTY has been in the uptrending channel. It has been broken to the downside with huge volume power.
If we look at the chart now:
The market has broken the channel to the downside and is continuing its momentum to the downside.
Whereas 21900 is a good support zone that might provide support. If it's broken, the next support point will be 21500. as marked in the chart.
If we look at the OI data:
PCR = 0.50 shows huge bearishness in the market. 22000 is a max pain point for now. On lower levels, there are not many support levels. On higher levels, there is huge CE writing at 22000, 22100, 22200 ... etc.
I am expecting the market to fall more to 21500 levels this week.
Reasons:
RSI < 40 shows weakness in bulls.
price < EMAs shows bearish strengthen market.
PCR = 0.50 shows a bearish market.
price < VWAP indicates bearish sentiment in the market.
Verdict: Bearish
Plan of Action: Sell 21900 CE (Hedge it with 15 premium CE).
11 Mar ’24 — Nifty above Support, BankNifty just broke oneNifty Analysis - Stance Bullish ⬆️
Recap from yesterday: “If US markets advance and take out their ATHs by then, we can expect a huge gap up in the next session. In case the Global macros weaken over the weekend — the Bull’s party could be cut short too.”
4mts chart
Nifty fell 219pts ~ 0.97% intraday and yet it has not broken the support level of 22295. If we had a close below this SR level, we would have changed the stance back to neutral, as it stands the bullish stance continues. The fall was pretty one-sided and had all the characteristics of a profit-booking. The biggest issue we have is that CE short sellers are “weak” handed and they run for cover pretty soon. And every time that happens, the markets go to a higher level just due to momentum. The best time for bears to push down the prices is now, conditions are favorable and we are heading into elections. But they need to be a bit more strong.
On the higher time frame, Nifty has made another higher high and higher low showing the strength of the bullish run. If Nifty50 has to change its character, the price has to fall below 22295 and then below 22051 wherein the higher low will get violated. If 22295 becomes a resistance from there on, then we might even see a triple top formation which should give the Bears an edge. Having said that, the dip buyers are too strong that traders like us feel pissed off. We are witnessing a market that is failing to fall. We all know what would happen if all the participants had a bullish view. Is it not far better if we have a healthy correction and then a new ATH?
63mts chart
Nifty analysis for 12/03/24.Nifty has given a nice break out of the parallel channel and now is retesting it.
On the hourly charts, the market seem to consolidate around the support levels.
If there is a gap up opening, a bullish trade can be captured in the index once it crosses 22420 levels with the targets of ATH.
Major support levels :- 22240, 22170
The market is in a bullish mode and every dip is being bought. Any bullish pattern around the support level can be bought in this scenario.
Even the seller are waiting for the market to short, but the sell off today doesn't seem to effect the bullish mode as it was slow and took time to test the lower levels.
RSI is showing some bearish divergence as the strenght also need to reset and come up for another bullish move.
Major resistance levels :-22420, 22510
Wait for the price action near the levels before entering the market.
NIFTY prediction for tomorrow 07 MAR 24As we discussed, NIFTY's sideways behavior touched the fib 0.38 level and came back to trading again at the resistance.
If we look at the chart now:
The market is trading at the resistance right now. This might force it to consolidate for tomorrow as its expiry for nifty on 7th Mar. market might expire in the marked region.
If we look at the OI data:
PCR = 1.0 indicates market bullish sentiments. 22500 has huge CE writing, which will provide huge resistance. On the lower side, each level 22400, 22300, and 22200 also has multiple support points.
I am expecting a sideways market tomorrow because of trading at resistance and expiry day.
Reasons:
Price > EMA indicates the bullish nature of the market. but price >> ema(200) shows market need some reversion.
RSI > 60 indicates bulls are having strength right now.
PCR = 1.34 shows bullishness; also, OI data shows multiple-level support in the option chain.
Nifty is trading at a resistance trendline and might get resistance. But as it has been touched multiple times, there is also a probability that it might get broken this time.
Verdict:
Sideways or Bullish
Plan of action:
Case 1: Sideways -> IRON CONDOR in range 22450 - 22550.
Case 2: Bullish -> Sell 22450 PE (Hedge it with 20rs PE)
Nifty swing trade set up with 1:10 RR1. Trend Bullish
2. RR lucrative with 1:10
3. Set up: a bounce from Support with morning star can appear
4. For early entry risk is less and reward can be handsome
FASP levels for Nifty 06/03/2024The FASP for Nifty is listed for 06-03-2024. You can add this levels to your trade setup for better results. This should not be the only indicator but an additional tool to increase your winning possibilities.
What is Fibolysis Anchor SupRes Points(FASP)?
It is a unique level arrived by using Fibonacci Retracement , Fibonacci Extension , Standard Pivot levels under various Timeframes. It is an extensively analyzed level to draw the support and resistance levels for the next day. You can use these levels along with your trade setup to increase your winning odds.
Validity of the levels: 1 Day
How to use these levels?
The three levels on both sides are usually easily achievable. The Targets above are bit difficult to achieve in a single trading session. I use this fact to write intraday positions and to buy options.
Color Coding: Green is regular support and buying area, Red is strong exit area
Disclaimer: This is shared in the interest of educational purpose and for knowledge enhancement. Kindly refer it in the same light. I am not responsible for any profits or loss incurred based on this information.
04 Mar ’24 N50, Perfect Flat day, straddlers fallen asleep todayNifty Analysis - Stance Bullish ⬆️
Recap from yesterday: “The odd man out today was NiftyIT, which did not want to participate in the rally and instead went the other way. It ended the day with a loss of 204 points.”
4mts chart
NiftyIT again shows its rebel attitude today, on a flattish day - NiftyIT losses 291 points ~ 0.77%. I am not suggesting that a stronger IT would have helped Nifty50 scale new heights today, just that the negative bias did not fit well with the other counters. Nifty and BankNifty had a perfectly flattish day today - a dream come true for the straddlers. Not conceding ground is still Bullish as the Bears are running out of fuel. Despite FIIs selling today - it really did not make a difference on the main indices.
On the higher timeframe, we have formed an island (Mar 2nd + today’s price action). On 2nd March we had the special session on which Nifty hit a new ATH of 22463. We did not take that out today, but the flattish stance bodes well with the Bullish narrative. Our stance continues to be bullish and the first support level would be 22295. It is a shallow support and not quite relevant for a stance change, but the momentum is what really matters. Since we do not have a resistance, the markets could go up to any extent and personally, I am not in favor of shorting even 22700 or 22800 as a single stride could wipe us out.
63mts chart
NIFTY Prediction for tomorrow 5th MarAs we discussed yesterday, NIFTY has been taking resistance at the resistance trendline and resulted sideways.
If we look at the chart now:
The market is trading at the Resistance trendline. The market has been in a range bound in (22350-22470). Also price >> EMA(200) (TF = 30 min) and EMA(13) >> EMA(200). This indicates that the market needs some correction or consolidation at this point.
If we look at the OI data:
PCR = 1.26 indicates the bullish nature of the market. There has been huge activity at 22400. NIFTY has equally distributed PE and CE writing on both sides. But at lower levels, the market has huge support at 22200 and 22000.
I am expecting 2 cases in the market, which have been marked in the chart.
Case 1: Support is at 22370, and resistance is at trendline.
Case 2: retracement till fib 0.38 level. (22220)
Reasons:
Price > EMAs show bullish sentiments. (Bullish)
Price >> EMA(200) and EMA(13) >> EMA(200) market might get some correction till 22200.
RSI ~ 63 (falling) shows weakness in bulls.
PCR = 1.25 shows bullish signal whereas combined week expiry shows PCR = 0.90 weekness in bulls for upcoming week. (sideways)
Price <= VWAP shows that the market price is balanced and can go either side. (Indecisive)
Verdict:
Sideways or Bullish
Plan of action:
Case 1: Iron condor in range 22300-22450.
Case 2 : Sell 22450 CE (Hedge is with 20 rs CE)
NIFTY prediction for tomorrow 4th MARAs we discussed NIFTY's bullish behavior in our last analysis, the Market (NIFTY) moved up 280 points.
If we look at the chart data:
The Market is trading at the resistance trendline zone. Also price >> EMA(200) (TF = 30 min) and EMA(13) >> EMA(200). This indicates that the Market needs some correction or consolidation at this point. Also, the Market is in an uptrend channel, which has formed a Higher High(HH). There is a possibility to form a higher low now.
If we look at OI Data:
PCR = 1.28, which shows the Market has bullish sentiments. There has been a huge PE writing at 22400. But if we look at the combined PCR = 0.99, it shows that the Market is likely to come down for some correction to form a Higher Low.
FII & DII data: FII is medium bearish because the Market is trading at the resistance trendline. Clients are bullish because the Market is trading at ATH.
I am expecting the Market to get some correction, at least till the level of 22200 (Fib 0.38 levels).
Reasons:
Price > EMAs show bullish sentiments. (Bullish)
Price >> EMA(200) and EMA(13) >> EMA(200) market might get some correction till 22200.
RSI ~ 75 needs some consolidation at this level. (sideways)
PCR = 1.28 shows bullish signal whereas combined week expiry shows PCR = 0.99 weekness in bulls for upcoming week. (sideways)
Price <= VWAP shows that the market price is balanced and can go either side. (Indecisive)
Verdict:
Sideways or Bullish
Plan of Action:
Case 1 : Iron condor in range 22300-22450.
Case 2 : Sell 22450 CE (Hedge is with 20 rs CE)
NIFTY : The tentative stage of a market melt-up stage in PROB#2NIFTY Projection Case Study:
Probability #2
Target Levels & Tentative Timings are marked in chart
In order to navigate the current market uncertainties effectively, it is crucial to grasp the specific stage of the market melt-up. Recognizing whether the market is in the early uptrend, an acceleration phase, or exhibiting signs of overbought conditions provides valuable insights for strategic decision-making. Acknowledging the risks associated with melt-ups, such as overvaluation and herding behavior, enables us to implement sound risk management practices. Similarly, being attuned to the potential dangers of a market melt-down, including fast declines and panic selling, empowers us to make informed decisions in this dynamic and ever-changing market environment.
A market melt-up typically occurs during the late stages of a bull market when investors rush to buy stocks, driving prices sharply higher. It is characterized by a sudden and intense upward momentum fueled by FOMO (fear of missing out). Melt-ups often precede market corrections or downturns, so caution is advised when witnessing extreme bullish behavior.
The exact timing of a market melt-up in NIFTY happened between 2003 to 2008. The rapid and excessive increase in asset prices driven by speculative buying and fear of missing out resulted in the 2008 financial crisis was marked by a severe downturn, triggered primarily by the collapse of the subprime mortgage market in the United States.
The duration of a melt-up can vary, and there is no fixed timeline for how long it lasts. Melt-ups are characterized by a rapid and intense upward movement in prices, often driven by speculative and fear-of-missing-out (FOMO) behavior among investors. The duration can be influenced by various technical factors, including market conditions, economic indicators, and global events.
In some cases, a melt-up can be relatively short-lived, with prices soaring over a few weeks or months before experiencing a correction. However, in other instances, a melt-up might extend for a more prolonged period if the speculative frenzy and optimistic sentiment persist even for several months or even years.
It's important to note that while melt-ups can result in significant gains, they often precede market corrections or downturns. Investors & traders should exercise caution and be aware of the potential risks associated with the unsustainable nature of extreme upward movements in asset prices. Monitoring market conditions using potential technical indicators and navigating using geometric analysis can help traders & investors make well-informed decisions during such periods.
In technical analysis, a melt-up is often characterized by rapid and aggressive upward price movements. Here are some technical indicators and patterns that might be associated with a typical melt-up:
Sharp Price Spikes: Look for sudden and substantial increases in the price of the asset, often accompanied by high trading volumes. This indicates strong buying interest.
Breakouts and Gaps: Melt-ups may involve breakouts above key resistance levels and price gaps as buyers enthusiastically enter the market, pushing prices higher without waiting for traditional technical levels.
Overbought Conditions: Indicators and oscillators to identify overbought conditions. Extremely high values can indicate that the market is overextended and vice versa.
Parabolic Moves: A parabolic price pattern, where the price accelerates upward in a steep curve, is often associated with a melt-up. This can be identified on a price chart.
FOMO Behavior: Market sentiment plays a crucial role in a melt-up. Watch for signs of Fear of Missing Out (FOMO) behavior among investors, which can contribute to an unsustainable rally.
Low Volatility Pullbacks: During a melt-up, pullbacks might be short-lived and characterized by low volatility. Buyers may quickly step in to take advantage of any dips.
It's important to note that while these indicators may suggest a melt-up, market dynamics can change, and there's always a level of unpredictability.
Risk management and staying informed about broader market conditions are crucial when navigating such extreme scenarios.
Melt-Up Factors observed in Technical Analysis:
Strong Momentum Indicators:
Bullish momentum, as indicated by rising indicators & oscillators having positive readings, can attract more buyers, fueling a melt-up.
Breakout Patterns:
Identification of bullish chart patterns like breakouts or continuation patterns may signal a strong upward move and contribute to a melt-up scenario.
Volume Surge:
High trading volumes accompanying the uptrend suggest increased participation and confidence among investors, reinforcing the melt-up trend.
Supportive Trendlines:
Upward-sloping trendlines provide a visual representation of the bullish trend, and their support can encourage further buying interest.
Liquidity Influx:
Positive market sentiment and an influx of liquidity, possibly driven by accommodative monetary policies, can contribute to a melt-up by facilitating higher valuations. Optimistic Market Psychology:
Positive news, economic indicators, or corporate earnings can create a bullish psychological environment, encouraging traders to adopt a buy-and-hold mentality.
Melt-Down Factors observed in Technical Analysis:
Divergence in Momentum Indicators:
Negative divergences in momentum indicators & oscillators can signal weakening upward momentum, potentially indicating an impending melt-down.
Bearish Reversal Patterns:
Recognition of bearish chart patterns, such as head and shoulders or double tops, can suggest a potential reversal in the trend, leading to a melt-down.
Increasing Selling Volumes:
A surge in selling volumes during a downtrend reflects strong selling pressure, exacerbating the downward movement and contributing to a melt-down.
Violation of Support Levels:
Breaking below key support levels or trendlines may trigger stop-loss orders and further selling, accelerating the melt-down process.
Market Sentiment Shifts:
Negative news, economic downturns, or geopolitical uncertainties can shift market sentiment, prompting investors to exit positions and contribute to a melt-down.
Liquidity Drying Up:
Reduced liquidity in the market, possibly due to risk aversion or tightening monetary policies, can exacerbate price declines during a melt-down.
Analyzing these technical factors provides insights into the dynamics of market movements, helping traders and investors navigate both bullish and bearish scenarios.
Stages of Melt-Up Using Technical Analysis:
Early Uptrend Recognition:
Identification of the initial signs of a bullish trend through technical indicators like moving averages, positive momentum, and breakout patterns.
Acceleration Phase:
Confirmation of the uptrend with strong momentum indicators, increasing trading volumes, and the development of bullish chart patterns, leading to an acceleration of price gains.
Overbought Conditions:
Recognition of overbought conditions using indicators, suggesting that the market may be reaching an unsustainable level of buying activity.
FOMO and Speculative Buying:
Increased speculation and FOMO behavior among investors, as indicated by rapid price increases, a surge in retail trading activity, and a shift towards riskier assets.
Parabolic Price Movement:
Observation of parabolic price movement, characterized by steep and unsustainable upward curves on charts, signaling an intensified phase of the melt-up.
Market Exuberance:
High levels of market exuberance and positive sentiment, possibly fueled by media coverage and optimistic economic outlooks, contributing to a euphoric atmosphere.
Stages of Melt-Down Using Technical Analysis:
Early Signs of Weakness:
Identification of initial signs of weakness in the uptrend, including negative divergences in momentum indicators, bearish reversal patterns, or a failure to sustain higher highs.
Loss of Key Support:
Breaking below key support levels or trendlines, triggering concerns among technical analysts about a potential shift in the trend.
Increased Selling Pressure:
Surge in selling volumes accompanied by downward price movements, signaling increased selling pressure and a potential acceleration of the melt-down.
Bearish Chart Patterns Confirmation:
Confirmation of bearish chart patterns, such as head and shoulders or double tops, supporting the case for a sustained downtrend.
Fear and Panic Selling:
Elevated fear and panic selling as investors rush to exit positions, exacerbating the downward pressure on prices.
Breakdown of Critical Levels:
Breaking through critical support levels, possibly triggering algorithmic trading strategies and stop-loss orders, intensifying the melt-down.
Understanding these stages using technical analysis can help traders and investors make informed decisions and implement risk management strategies during both melt-up and melt-down scenarios.
Risk and Dangers of a Market Melt-Up:
Overvaluation:
Melt-ups can lead to overvaluation, where asset prices detach from underlying fundamentals. This poses a risk of substantial losses when the market corrects.
Herding Behavior:
Investors may engage in herding behavior during a melt-up, following the crowd without considering fundamentals, increasing the risk of a sharp reversal.
Sudden Corrections:
Melt-ups are often followed by sudden corrections or market downturns. Investors entering late in the rally may face significant losses if they don't exit positions in time.
Excessive Risk-Taking:
The euphoria of a melt-up can lead to excessive risk-taking and leveraged positions, increasing vulnerability to market volatility.
Risk and Dangers of a Market Melt-Down:
Fast and Sharp Declines:
Melt-downs are characterized by fast and sharp declines in prices, catching investors off guard and resulting in substantial portfolio losses.
Panic Selling:
Fear and panic selling during a melt-down can exacerbate the decline, causing a cascading effect as more investors rush to liquidate positions.
Liquidity Issues:
Melt-downs may lead to liquidity issues, making it challenging for investors to exit positions at desired prices, amplifying losses.
Financial System Stress:
Severe market downturns can stress the financial system, potentially leading to disruptions in banking and other financial institutions.
Economic Impact:
Market melt-downs can have broader economic consequences, affecting consumer confidence, business investments, and overall economic stability.
A market melt-up poses risks as it can lead to overvaluation, herding behavior, and sudden corrections. Investors might be drawn into a euphoric buying frenzy, neglecting underlying fundamentals and taking excessive risks.
The danger lies in the potential for significant losses when the market corrects, catching latecomers off guard. Conversely, a market melt-down carries the risk of fast and sharp declines, triggering panic selling and liquidity issues. The rapid deterioration can stress the financial system, impacting not just investors but also having broader economic consequences. Both scenarios require vigilant risk management, strategic decision-making, and adaptability to navigate the inherent dangers associated with extreme market movements.
Using Technical Analysis to Mitigate Risks:
Risk Management:
Set clear risk management strategies, including stop-loss orders and position sizing, to protect against significant losses.
Diversification:
Diversify your portfolio across different asset classes to spread risk and reduce the impact of a severe market event.
Stay Informed:
Regularly monitor technical indicators, trend reversals, and market sentiment to stay informed about potential shifts in market conditions.
Avoid Chasing Trends:
Avoid chasing trends during melt-ups and practice disciplined investing to mitigate the risk of entering the market at unsustainable levels.
Adaptability:
Be adaptable and ready to adjust your investment strategy based on changing technical signals and market dynamics.
While technical analysis can provide valuable insights, it's essential to combine it with a holistic approach to risk management and a thorough understanding of market dynamics to navigate the challenges associated with both melt-ups and melt-downs.
Disclaimer:
The information provided in the technical analysis charts published on this TradingView account is for educational and informational purposes only. It does not constitute financial advice, investment recommendations, or trading strategies.
Trading and investing in financial markets involve risk, and past performance is not indicative of future results. The charts and analysis presented here may not guarantee accuracy or completeness, and users are encouraged to conduct their own research and seek professional advice before making any investment decisions.
The author of these charts is not responsible for any losses, damages, or other liabilities arising from the use of the information presented. Users should be aware of the inherent risks associated with trading and carefully consider their financial situation and risk tolerance before engaging in any trading activities.
By accessing and using the information provided in these charts, users acknowledge and agree to the terms of this disclaimer.
NIFTY : The tentative stage of a market melt-up stage in PROB#1NIFTY Projection Case Study:
Probability #1
Target Levels & Tentative Timings are marked in chart
In order to navigate the current market uncertainties effectively, it is crucial to grasp the specific stage of the market melt-up. Recognizing whether the market is in the early uptrend, an acceleration phase, or exhibiting signs of overbought conditions provides valuable insights for strategic decision-making. Acknowledging the risks associated with melt-ups, such as overvaluation and herding behavior, enables us to implement sound risk management practices. Similarly, being attuned to the potential dangers of a market melt-down, including fast declines and panic selling, empowers us to make informed decisions in this dynamic and ever-changing market environment.
A market melt-up typically occurs during the late stages of a bull market when investors rush to buy stocks, driving prices sharply higher. It is characterized by a sudden and intense upward momentum fueled by FOMO (fear of missing out). Melt-ups often precede market corrections or downturns, so caution is advised when witnessing extreme bullish behavior.
The exact timing of a market melt-up in NIFTY happened between 2003 to 2008. The rapid and excessive increase in asset prices driven by speculative buying and fear of missing out resulted in the 2008 financial crisis was marked by a severe downturn, triggered primarily by the collapse of the subprime mortgage market in the United States.
The duration of a melt-up can vary, and there is no fixed timeline for how long it lasts. Melt-ups are characterized by a rapid and intense upward movement in prices, often driven by speculative and fear-of-missing-out (FOMO) behavior among investors. The duration can be influenced by various technical factors, including market conditions, economic indicators, and global events.
In some cases, a melt-up can be relatively short-lived, with prices soaring over a few weeks or months before experiencing a correction. However, in other instances, a melt-up might extend for a more prolonged period if the speculative frenzy and optimistic sentiment persist even for several months or even years.
It's important to note that while melt-ups can result in significant gains, they often precede market corrections or downturns. Investors & traders should exercise caution and be aware of the potential risks associated with the unsustainable nature of extreme upward movements in asset prices. Monitoring market conditions using potential technical indicators and navigating using geometric analysis can help traders & investors make well-informed decisions during such periods.
In technical analysis, a melt-up is often characterized by rapid and aggressive upward price movements. Here are some technical indicators and patterns that might be associated with a typical melt-up:
Sharp Price Spikes: Look for sudden and substantial increases in the price of the asset, often accompanied by high trading volumes. This indicates strong buying interest.
Breakouts and Gaps: Melt-ups may involve breakouts above key resistance levels and price gaps as buyers enthusiastically enter the market, pushing prices higher without waiting for traditional technical levels.
Overbought Conditions: Indicators and oscillators to identify overbought conditions. Extremely high values can indicate that the market is overextended and vice versa.
Parabolic Moves: A parabolic price pattern, where the price accelerates upward in a steep curve, is often associated with a melt-up. This can be identified on a price chart.
FOMO Behavior: Market sentiment plays a crucial role in a melt-up. Watch for signs of Fear of Missing Out (FOMO) behavior among investors, which can contribute to an unsustainable rally.
Low Volatility Pullbacks: During a melt-up, pullbacks might be short-lived and characterized by low volatility. Buyers may quickly step in to take advantage of any dips.
It's important to note that while these indicators may suggest a melt-up, market dynamics can change, and there's always a level of unpredictability.
Risk management and staying informed about broader market conditions are crucial when navigating such extreme scenarios.
Melt-Up Factors observed in Technical Analysis:
Strong Momentum Indicators:
Bullish momentum, as indicated by rising indicators & oscillators having positive readings, can attract more buyers, fueling a melt-up.
Breakout Patterns:
Identification of bullish chart patterns like breakouts or continuation patterns may signal a strong upward move and contribute to a melt-up scenario.
Volume Surge:
High trading volumes accompanying the uptrend suggest increased participation and confidence among investors, reinforcing the melt-up trend.
Supportive Trendlines:
Upward-sloping trendlines provide a visual representation of the bullish trend, and their support can encourage further buying interest.
Liquidity Influx:
Positive market sentiment and an influx of liquidity, possibly driven by accommodative monetary policies, can contribute to a melt-up by facilitating higher valuations. Optimistic Market Psychology:
Positive news, economic indicators, or corporate earnings can create a bullish psychological environment, encouraging traders to adopt a buy-and-hold mentality.
Melt-Down Factors observed in Technical Analysis:
Divergence in Momentum Indicators:
Negative divergences in momentum indicators & oscillators can signal weakening upward momentum, potentially indicating an impending melt-down.
Bearish Reversal Patterns:
Recognition of bearish chart patterns, such as head and shoulders or double tops, can suggest a potential reversal in the trend, leading to a melt-down.
Increasing Selling Volumes:
A surge in selling volumes during a downtrend reflects strong selling pressure, exacerbating the downward movement and contributing to a melt-down.
Violation of Support Levels:
Breaking below key support levels or trendlines may trigger stop-loss orders and further selling, accelerating the melt-down process.
Market Sentiment Shifts:
Negative news, economic downturns, or geopolitical uncertainties can shift market sentiment, prompting investors to exit positions and contribute to a melt-down.
Liquidity Drying Up:
Reduced liquidity in the market, possibly due to risk aversion or tightening monetary policies, can exacerbate price declines during a melt-down.
Analyzing these technical factors provides insights into the dynamics of market movements, helping traders and investors navigate both bullish and bearish scenarios.
Stages of Melt-Up Using Technical Analysis:
Early Uptrend Recognition:
Identification of the initial signs of a bullish trend through technical indicators like moving averages, positive momentum, and breakout patterns.
Acceleration Phase:
Confirmation of the uptrend with strong momentum indicators, increasing trading volumes, and the development of bullish chart patterns, leading to an acceleration of price gains.
Overbought Conditions:
Recognition of overbought conditions using indicators, suggesting that the market may be reaching an unsustainable level of buying activity.
FOMO and Speculative Buying:
Increased speculation and FOMO behavior among investors, as indicated by rapid price increases, a surge in retail trading activity, and a shift towards riskier assets.
Parabolic Price Movement:
Observation of parabolic price movement, characterized by steep and unsustainable upward curves on charts, signaling an intensified phase of the melt-up.
Market Exuberance:
High levels of market exuberance and positive sentiment, possibly fueled by media coverage and optimistic economic outlooks, contributing to a euphoric atmosphere.
Stages of Melt-Down Using Technical Analysis:
Early Signs of Weakness:
Identification of initial signs of weakness in the uptrend, including negative divergences in momentum indicators, bearish reversal patterns, or a failure to sustain higher highs.
Loss of Key Support:
Breaking below key support levels or trendlines, triggering concerns among technical analysts about a potential shift in the trend.
Increased Selling Pressure:
Surge in selling volumes accompanied by downward price movements, signaling increased selling pressure and a potential acceleration of the melt-down.
Bearish Chart Patterns Confirmation:
Confirmation of bearish chart patterns, such as head and shoulders or double tops, supporting the case for a sustained downtrend.
Fear and Panic Selling:
Elevated fear and panic selling as investors rush to exit positions, exacerbating the downward pressure on prices.
Breakdown of Critical Levels:
Breaking through critical support levels, possibly triggering algorithmic trading strategies and stop-loss orders, intensifying the melt-down.
Understanding these stages using technical analysis can help traders and investors make informed decisions and implement risk management strategies during both melt-up and melt-down scenarios.
Risk and Dangers of a Market Melt-Up:
Overvaluation:
Melt-ups can lead to overvaluation, where asset prices detach from underlying fundamentals. This poses a risk of substantial losses when the market corrects.
Herding Behavior:
Investors may engage in herding behavior during a melt-up, following the crowd without considering fundamentals, increasing the risk of a sharp reversal.
Sudden Corrections:
Melt-ups are often followed by sudden corrections or market downturns. Investors entering late in the rally may face significant losses if they don't exit positions in time.
Excessive Risk-Taking:
The euphoria of a melt-up can lead to excessive risk-taking and leveraged positions, increasing vulnerability to market volatility.
Risk and Dangers of a Market Melt-Down:
Fast and Sharp Declines:
Melt-downs are characterized by fast and sharp declines in prices, catching investors off guard and resulting in substantial portfolio losses.
Panic Selling:
Fear and panic selling during a melt-down can exacerbate the decline, causing a cascading effect as more investors rush to liquidate positions.
Liquidity Issues:
Melt-downs may lead to liquidity issues, making it challenging for investors to exit positions at desired prices, amplifying losses.
Financial System Stress:
Severe market downturns can stress the financial system, potentially leading to disruptions in banking and other financial institutions.
Economic Impact:
Market melt-downs can have broader economic consequences, affecting consumer confidence, business investments, and overall economic stability.
A market melt-up poses risks as it can lead to overvaluation, herding behavior, and sudden corrections. Investors might be drawn into a euphoric buying frenzy, neglecting underlying fundamentals and taking excessive risks.
The danger lies in the potential for significant losses when the market corrects, catching latecomers off guard. Conversely, a market melt-down carries the risk of fast and sharp declines, triggering panic selling and liquidity issues. The rapid deterioration can stress the financial system, impacting not just investors but also having broader economic consequences. Both scenarios require vigilant risk management, strategic decision-making, and adaptability to navigate the inherent dangers associated with extreme market movements.
Using Technical Analysis to Mitigate Risks:
Risk Management:
Set clear risk management strategies, including stop-loss orders and position sizing, to protect against significant losses.
Diversification:
Diversify your portfolio across different asset classes to spread risk and reduce the impact of a severe market event.
Stay Informed:
Regularly monitor technical indicators, trend reversals, and market sentiment to stay informed about potential shifts in market conditions.
Avoid Chasing Trends:
Avoid chasing trends during melt-ups and practice disciplined investing to mitigate the risk of entering the market at unsustainable levels.
Adaptability:
Be adaptable and ready to adjust your investment strategy based on changing technical signals and market dynamics.
While technical analysis can provide valuable insights, it's essential to combine it with a holistic approach to risk management and a thorough understanding of market dynamics to navigate the challenges associated with both melt-ups and melt-downs.
Disclaimer:
The information provided in the technical analysis charts published on this TradingView account is for educational and informational purposes only. It does not constitute financial advice, investment recommendations, or trading strategies.
Trading and investing in financial markets involve risk, and past performance is not indicative of future results. The charts and analysis presented here may not guarantee accuracy or completeness, and users are encouraged to conduct their own research and seek professional advice before making any investment decisions.
The author of these charts is not responsible for any losses, damages, or other liabilities arising from the use of the information presented. Users should be aware of the inherent risks associated with trading and carefully consider their financial situation and risk tolerance before engaging in any trading activities.
By accessing and using the information provided in these charts, users acknowledge and agree to the terms of this disclaimer.
NIFTY prediction for tomorrow 1 Mar 24As we discussed with NIFTY yesterday, NIFTY took support at 21900. and then become bullish.
If we see the chart data now:
The market is trading just above the 200 EMA after taking good support at 21900. The last two candles have been very volatile, with huge volumes in them, which indicates that nifty is going to be in upcoming sessions. RSI is trading at the resistance line; if it breaks it to the upside, it is going to give a nice momentum.
If we look at the OI data:
PCR = 0.86, which indicates the market's bullish structure. Where 22000, 21900, and 21800 have huge bullish OI buildup. Which is going to provide a good support. 22100, 22200, and 22300 have very nice CE writing, which is going to provide a good resistance point, which is also supported by the chart Price action data.
I expect the market to be inside the highlight zone with two different scenarios marked on the chart.
Reasons:
Price > EMAs show the market is having bullish sentiment.
RSI is at the trendline and about to cross 60; if it crosses 60 to the upside, we can expect a good bullish momentum.
Price > VWAP shows that the market price is balanced with volume.
PCR = 0.86 shows the market is bullish.
The market is trading inside the falling wedge. If it breaks upside, we can expect a good bullish momentum, which is also supported by the OI data.
Verdict:
Bullish
Plan of Action:
Once take support --> Sell 22000 PE (hedge it with 20 rs PE)
FASP levels for Nifty 29/02/2024The FASP for Nifty is listed for 29-02-2024. You can add this levels to your trade setup for better results. This should not be the only indicator but an additional tool to increase your winning possibilities.
What is Fibolysis Anchor SupRes Points(FASP)?
It is a unique level arrived by using Fibonacci Retracement , Fibonacci Extension , Standard Pivot levels under various Timeframes. It is an extensively analyzed level to draw the support and resistance levels for the next day. You can use these levels along with your trade setup to increase your winning odds.
Validity of the levels: 1 Day
How to use these levels?
The three levels on both sides are usually easily achievable. The Targets above are bit difficult to achieve in a single trading session. I use this fact to write intraday positions and to buy options.
Color Coding: Green is regular support and buying area, Red is strong exit area
Disclaimer: This is shared in the interest of educational purpose and for knowledge enhancement. Kindly refer it in the same light. I am not responsible for any profits or loss incurred based on this information.
NIFTY prediction for tomorrow 28 Feb 24Let's discuss the NIFTY Expiry prediction for tomorrow which gave a very nice fall today.
If we look at the chart now:
The market is trading at the support trendline. Also, the market is near 200 EMA, which might provide good support at this point. 21912 has also proven to be good price action support in the past.
If we look at the OI data:
PCR = 0.6, which shows the bearish market structure. Above the side, there is quite the resistance at 22,000, 22100, and 22200. and there is little support if the current level is broken to the downside.
If we look at the FII & DII data, it directly indicates a bearish market structure where pros have heavily shorted options.
Now, there are two cases at this point.
Case 1 : The market can take support at this support line. And move to the bull side.
Case 2 : If the market is broken to the downside. It can give the target till 21587.
Reasons:
Price-taking support at 200 EMA, which might lead it back to bullish momentum after some consolidation.
Price < EMA(13) means bulls are not having much strength.
RSI < 40 shows weak bulls strength.
OI data PCR = 0.60 shows heavy bearish.
FII and DII data show heavy bearishness.
Verdict : Bearish
Plan of Action:
Case 1: Takes support at 200 EMA --> Sell 22000 PE (Hedge it with 20 rs PE)
Case 2: If the market is broken to the downside. --> Sell 21900 CE (Hedge it with 20 rs CE)
Nifty Analysis For 29 Feb 24Buy and Sell when price sustain above or below our levels and see the results
Nifty intraday levels for monthly expiry 29/02/24.Nifty has formed a M pattern on the hourly charts and closed below 22k levels.
It has closed around the 20 ema on the daily charts. If there is a gap down opening, another selling can be seen in the market.
In case there is a gap up to flat opening, wait for the price to breach below the support zone.
Major support levels :- 21920, 21830
Tomorrow is the monthly expiry and today market gave a good selling market. There are chance of giving a good movement.
Another follow through can be seen in the market. So just watch the market takes out today's low.
Major resistance levels :- 22100, 22210
Just wait for a pattern formation around the zone and trade only the setup as option premium will give a decay.
If VIX is high, option premium will be high. Option buyer need to take a entry when there is momentum in the market.
Wait for the price action near the levels before entering the market.
Nifty analysis for 28th feb 2024Nifty is travelling inside a channel. the possible support and resistance is marked in the chart.
Disclaimer: All information provided here is for educational purposes and not a recommendation, advice, research report, or stock tip of any nature. Analysis Posted here is just our view/personal study method on the stocks, commodities or other instruments and assets. Do your own analysis or consult your financial advisor before making any investment decision.
