Hi,
So we all started on a sentimental note and it seems we are correcting again on the same sentimental notes. It may be too early to say that the top has reached coz I, like many had upper side targets of 3790. Till elections nothing can be ruled out, upside tgts are very much possible but Nifty is showing for the first time real weakness. Clearly on graphs weakness started on Friday, but since we are in trading range hopes were alive till today for pullback. But todays last moment touching of 3540 and a very weak pullback confirmed that for the time being bullish hopes are out of scene.
Bullish market has always been range bound breaking its range with amazing gap ups or fierce rallies. Similarity during these range is that they never breached their 200 points trading range on the downside.
Now for some time the range has contracted clearly, giving 100 points range(see the rectangle for 100 points range), and thatz the first signal for weakness (completely ignored by me). New thing this time is that earlier there was buying at every dips but today only nobody was buying at dips which is quite clear at the closing time of Nifty. One more point to notice is that range is always broken by either through gap up or through big green candle. This time we got big red candle breaking up this 100 points range.
Fundamentally speaking there was nothing wrong in todays market, we got a firm opening in cues with asian market. We got positive news for our two nifty heavy weights SBI and ICICI Bank which holded Nifty initially but lost due to heavy selling pressure. Only negative today was Dows future trading 90-100 points discount. Now this happened earlier too, but this time its purely sentimental may be because of election worries or traders not willing to give more premium to stocks at current lvls.
Interesting Gap Filling Coming Up
Trading Gaps are always fascinating and this time we got a big gap to trade. If you are familiar with gaps than you must know that Gap are excellent support. Gaps are never penetrated, and once if their range is touched then Gap filling is for sure, n thts what was seen at todays chart.
Red rectangle above is touched by todays candles and day closed very close to the Gap indicating that high probability is there that we can fill the gap tomorrow. Generally it is seen that price either reverts completely from the gap or fills it in coming sessions. So its a high time trading this Gap either we see a complete revert( most unlikely in current scenario coz we got enough time today and couldn't revert) or a complete filling of the gap. So a complete 100 points game from here. Btw Gap target is 3480.
Scenario 2
See current down surge is just due to hopes that lvls are highly overbought or at a very high premium. Nothing major has so far hit the market. Infact U.S jobless data has shrunk a bit and other stats are positive too. Coming to our Indian market picture will be clear by 17th of May and we might see some stable government coming into power which may lead to a surge again. If that will be the case then we are most likely to find support somewhere around our favorite fibs lvls. Also Nifty got a track record of finding support @ 23.6% retracement lvls (chk earlier posts), this time it can find support at the same lvls(its highly subjective but true so far, also fibs are one of my best lead indicators). And if you are some hardcore bear then for your kind info if Nifty retraces to a greater extent without any much fuss or major bad news, then it may find support @ 3280 which is the next fib retracement lvl or @ 3300 which is major support. One more interesting support might come from Trend Diviation signal line @ 1. On smaller tf TD has broken its signal line indicating weakness, but real test will be on daily charts, will be interesting to see in the coming days.
Hope you loved reading it.
So we all started on a sentimental note and it seems we are correcting again on the same sentimental notes. It may be too early to say that the top has reached coz I, like many had upper side targets of 3790. Till elections nothing can be ruled out, upside tgts are very much possible but Nifty is showing for the first time real weakness. Clearly on graphs weakness started on Friday, but since we are in trading range hopes were alive till today for pullback. But todays last moment touching of 3540 and a very weak pullback confirmed that for the time being bullish hopes are out of scene.
Bullish market has always been range bound breaking its range with amazing gap ups or fierce rallies. Similarity during these range is that they never breached their 200 points trading range on the downside.
Now for some time the range has contracted clearly, giving 100 points range(see the rectangle for 100 points range), and thatz the first signal for weakness (completely ignored by me). New thing this time is that earlier there was buying at every dips but today only nobody was buying at dips which is quite clear at the closing time of Nifty. One more point to notice is that range is always broken by either through gap up or through big green candle. This time we got big red candle breaking up this 100 points range.
Fundamentally speaking there was nothing wrong in todays market, we got a firm opening in cues with asian market. We got positive news for our two nifty heavy weights SBI and ICICI Bank which holded Nifty initially but lost due to heavy selling pressure. Only negative today was Dows future trading 90-100 points discount. Now this happened earlier too, but this time its purely sentimental may be because of election worries or traders not willing to give more premium to stocks at current lvls.
Interesting Gap Filling Coming Up
Trading Gaps are always fascinating and this time we got a big gap to trade. If you are familiar with gaps than you must know that Gap are excellent support. Gaps are never penetrated, and once if their range is touched then Gap filling is for sure, n thts what was seen at todays chart.
Red rectangle above is touched by todays candles and day closed very close to the Gap indicating that high probability is there that we can fill the gap tomorrow. Generally it is seen that price either reverts completely from the gap or fills it in coming sessions. So its a high time trading this Gap either we see a complete revert( most unlikely in current scenario coz we got enough time today and couldn't revert) or a complete filling of the gap. So a complete 100 points game from here. Btw Gap target is 3480.
Scenario 2
See current down surge is just due to hopes that lvls are highly overbought or at a very high premium. Nothing major has so far hit the market. Infact U.S jobless data has shrunk a bit and other stats are positive too. Coming to our Indian market picture will be clear by 17th of May and we might see some stable government coming into power which may lead to a surge again. If that will be the case then we are most likely to find support somewhere around our favorite fibs lvls. Also Nifty got a track record of finding support @ 23.6% retracement lvls (chk earlier posts), this time it can find support at the same lvls(its highly subjective but true so far, also fibs are one of my best lead indicators). And if you are some hardcore bear then for your kind info if Nifty retraces to a greater extent without any much fuss or major bad news, then it may find support @ 3280 which is the next fib retracement lvl or @ 3300 which is major support. One more interesting support might come from Trend Diviation signal line @ 1. On smaller tf TD has broken its signal line indicating weakness, but real test will be on daily charts, will be interesting to see in the coming days.
Hope you loved reading it.
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