Nifty50: Sell the rallies

Officially the long-term trend is intact. However, near term dynamics, bearish divergence and long-term Wave counts all suggest the end is nigh… Our focus is completely on a near-term bear market and a long-term trend reversal. Both have substantial down side potential, limited upside risk and huge implications for longer term investor strategies.

For the near term investors we suggest selling the rallies up to ~11285. Setting a new lower peak at or below this area immensely increases the chances of a long-term trend breach and thus near primary down trend. In this case ~10000 and ~9400 are relatively easy targets on a 6-12 month horizon.

A solid exit-long for longer term investors and a big opportunity for short-entries.

  • Primary trend: positive (late phase, negative < 10800)
  • Outlook: long-term trend reversal expected
  • Strategy: exit-long and/or short-entry on rallies
  • Support: 10800 / 10490 / 10110-
  • Resistance: 11210 / 11285 / 11755+
  • Major shift in sentiment: below 10800

Daily chart Nifty50 NSE India

25 June 2018

Although a lot less bearish than most other Asian markets, the Nifty does show signs of peaking and signs of underlying weakness. The nasty reversal high of early May once again proves strength as resistance while momentum is ebbing away. Renewed pressure towards 10710 is extremely likely.

Clearing this intermediate support area opens the road for a more substantial decline; 10605 and the cluster around 10570 seem the most likely candidates on the intraday chart. The long term outlook is too fuzzy to actively trade on, but it cannot be excluded that near term weakness will lead to a longer term decline as well.

For now focus is on the down side, especially if 10710 is taken out as trigger/minor support.

  • Primary trend: neutral
  • Outlook: feeling heavy, negative < 10710
  • Strategy: avoid / trading-short
  • Support: 10710 / 10605* / ~10570
  • Resistance: 10885 / 10990 / 11125+
  • Outlook cancelled/neutralized: above 10990

420-minute Intraday Chart 

10 April 2018

Prices remain close to resistance around 10340/10360. Buyers are currently trying to force a move higher and thus to end the bearish phase all together, but conviction is still low. Nevertheless we have switched to a more neutral stance for the time being. “Too weak to buy and not weak enough to sell”.

Await further developments over the coming hours and days for new signals.

  • Primary trend: negative/neutral
  • Outlook: uncertain
  • Strategy: avoid
  • Support: 10060 / 9522 / 9274 / 8448
  • Resistance: 10360 / 10480 / 11130+
  • Outlook cancelled/neutralized: n/a

420-minute Intraday Chart 

4 April 2018

The very near term trend remains a bit choppy, but the general direction is clearly bearish. This type of trend is not very easy to trade, keep that in mind when seeking good short-entries.

Currently the market seems to be in the process of setting a new lower peak below the broken trend line around 10340<>10360. As long as this zone holds out our focus us on the down side. Main targets come in at 9522 and 9274. Obviously these levels are a considerable distance away. Hold short with trailing stops (currently at 10360).

  • Primary trend: negative
  • Outlook: deep weekly correction/bearish phase, negative
  • Strategy: hold-short
  • Support: 9895 / 9522 / 9274 / 8448
  • Resistance: 10340 / 10360 / 10480+
  • Outlook cancelled/neutralized above 10360

420-minute Intraday Chart 

19 March 2018

Sellers are driving prices lower with conviction. Various support levels have given way leaving no significant level until roughly 9522 and 9274. These levels are formed by major upward retracements and down side projections. We suggest keeping focus on those to unload some shorts at these levels. Use trailing stops at 10525 and see how price action develops over the next few days.

  • Primary trend: negative
  • Outlook: correction/bearish phase, negative
  • Strategy: hold-short and/or entry-short
  • Support: 9895 / 9522 / 9274 / 8448
  • Resistance: 10480 / 10525 / 10630
  • Outlook cancelled/neutralized above 10525

420-minute Intraday Chart