Date 24-04-2016                                                Nifty Spot 7899.30

Hi,

Readers

Nifty moved exactly as was mentioned by me in my previous blog dated April 17, 2016.

Wherein it was mentioned that I will be a seller in Nifty between 7950 to 8000 levels. Nifty faced heavy resistance between the levels of 7950 to 8000 and made the high of 7978 only.

IN all the 4 trading days in the truncated week Nifty gave the opportunity to sell it daily and whosoever would have shorted Nifty on the basis of my blog would have made money in all the four days of the week.

Overall, Nifty however did not fall much, but, on all the trading days on intraday basis Nifty gave good rewards.

If the Nifty would have fallen more, then, their would have been more rewards. This is market, it decides the rewards itself and one should be satisfied with it.

Readers would be remembering, that, I mentioned in my last blog that, Nifty should face heavy resistance between 7950 to 8000 as it is not supported by indicators. And without indicators it can not move up run through. It has to fall or has to stop there and consolidate which it has done.

Indicators are like oxygen, and if, oxygen is not there then one cannot move on.

Same happened.

Can we say that consolidation is complete ???

Answer is  NO.

But this consolidation of 4 days was a consolidation no doubt and has its impact.

As they say "Mehndi lagi hai toh rang toh layegi".

This consolidation on my charts has acted as borrowed oxygen and allowed moving space to Nifty of further 100- 150 points.

Which means that now the level of 7950 to 8000 has now shifted to 8050 around levels plus minus few points. Where indicators will again be divergent with Nifty’s up move.

Remember that indicators are still not fully supporting up move of Nifty, they have only allowed breathing  space to Nifty. As if, indicators are having a cup of tea.

Now What :-

Now Nifty is standing at very crucial point at 7899.

Nifty has also made Doji on weekly charts.

On short term charts many indicators are now co-inciding, which indicates that time has come for Nifty to move on 100-150 points in either side in next few days.

 If the breathing space was not provided by indicators I would have easily said that Nifty will certainly fall from here. But since breathing space is provided. Which means that in next day or two Nifty is ready for a move of 100- 150 points on either side.

Which levels to watch :-

The levels on the upside are 7935 and on lower side are 7870. Just 65 points band.

If Nifty stays below 7870 for some time then it would mean that the intermediate top has been formed by Nifty. And Nifty is coming down and lower levels are coming.

Remember, keep shorting Nifty below 7870 for lower levels again and again even if Nifty gives any false move after staying below 7870. Because illusions and volatility are sometimes created for weak hand traders who gets fearfull sometimes.

If Nifty stays above 7935 for some time then it would mean that Nifty is using that breathing space and may want to move up further as explained above, in that case 7870 will act as stop and reverse level means exit the long position below 7870 and short sell at that point for lower levels.

I am repeating that, Nifty’s up move now is not supported by indicators. Which means that now it is just a matter of time when Nifty will give correction. Nifty can only use the breathing space provided to it by indicators. That too in next few days.

In nut shell, Because of the breathing space provided by indicators, Nifty stay above 7930 level of 8050 around level is not ruled out. Stay Below 7870 correction is coming. Keep selling below 7870 again and again.

Trade accordingly.

Date  17.04.2016                                                   Nifty Spot 7850.45

Nifty rebounded from support levels of 7525 and as soon as it closed above 7652 it accelerated the pace and closed the week at 7850.45.

Now What :-

Now Nifty has closed at 7850. It has broken out of the range and tussle area. It is well on course to break 200 DMA which is at 7872. Weekly trend line is also placed at 7889.

But the indicators are not in line with the Breakout. Means indicators are not supporting breakout and not giving clear signs that it will carry on run through. Which means that either the breakout is not real or Nifty will spend some more time in a range to allow the indicators to support and justify the move. Means that in both the scenarios it may well be the time to gradually close the long positions and wait.

In the moves when indicators does not support the move it is the normal behavior of Nifty when the price moves in one direction sharply it has the tendency to break the levels sharply to give false impression. These things often happens with good or bad news as the case may be playing its role at that point. Movement of indicators are like oxygen to human being or like safety net. If the price move with indicators then the move is safe and secure and can be relied upon. And if they does not support the move then one has to be suspicious.

Nifty Mid cap index is also approaching resistance area. Combination of all above indicates, that, I would not be a fresh buyer now. After some more points in Nifty i.e. Around or near 7950-8000 with such a kind of indicators location and setup. I will not be interested in buying and chances are high that Nifty will come down ultimately.

However if Nifty wants to go up further from those levels then the conditions are that it needs to consolidate there at higher levels and allow the indicators to gain strength. And if that happens I will be comfortable in taking long position there. But till that does not happen, with the currents setup of indicators sudden and sharp correction is more likely.

Strategy is to close the long positions and look for selling opportunities at higher levels. If Nifty does not correct from higher levels and starts consolidating at higher levels then I am open to idea of buying again.

 In case of run through move in Nifty towards higher levels without consolidation I would look for selling possibilities.

 Dated :- 10.04. 2016                                 NIFTY SPOT : 7555.20

Hi,

Readers,

Kudos again.

Nifty moved as expected and as was mentioned in my previous blog.

It was clearly mentioned in my blog that below 7668 expect lower levels in Nifty and the same happened. Once Nifty broke the level of 7668 it kept on falling and made a low of 7526 and closed at 7555.20.

Readers would have enjoyed the fall in Nifty.

Now What :-

Since Nifty has fallen as expected.

Book part profits here and hold the balance short position with trailing stop loss of 7652 closing basis.

Enjoy the profits.

 Dated :- 03.04. 2016                                 NIFTY SPOT : 7713.05

Hi,

Readers,

Nifty moved as expected and as was mentioned in my previous blog.

As expected Nifty corrected on Monday and made a low of 7582 thereby giving readers the opportunity to make profits.

But due to Yellen speech Nifty again came back to close at par virtually at previous week closing of 7716.

Now What :-

Now Nifty has taken a small correction and is now in counter rebound move.

Chartically this is very important time. As Nifty is standing at same levels where it was last week, after cutting short the correction (as it has again came back from 7582 only). Which indicates that it may have the power to move up some more points also. I call them counter rebounds. One should not ignore them. Till the time these counter rebounds does not loose their steam one should not try to sell, they have the tendency to surprise by their sharp moves.

Now, the chart are giving signals that, if, Nifty does not fall immediately then it has the power to move up to even 7880+ levels also.

The Question which should come in mind is that, when one should assume that Nifty is willing to fall immediately. For that 7668 is important level, Decisive close below this level for two consecutive days will indicate that Nifty is willing to fall immediately. And this breakdown will be further confirmed on break below 7582. For this trade stop loss should be very tight i.e. 7723 closing basis.

 If Nifty does this then the counter rebound is over and lower levels are coming. Otherwise Nifty can further climb 100-150 points.

But remember that if counter rebound has saved the Nifty to fall for once. The fall is imminent and it will come with more force second time. Thus if Nifty moves up then play the up move with very tight stop loss of 7668 closing basis. And donot be over bullish.

In Nut shell :- Now 7668 closing basis will be very important. Till Nifty is above that bias should be positive and once it closes below 7668 bias should be bearish.

We have RBI credit policy also on April 05^th which will decide the path for Nifty. Which can also create big volatility also.

Trade accordingly.

What is Counter Rebound :- When any security/index say Nifty starts correction, but do not correct fully, and cut the correction short, and in mid way rebounds back again and crosses the previous high from where it started correction. I call them counter rebounds.