Posting the Market Insight and Observations for trading Nifty in the coming Week.
1. The Daily chart is Oversold and looks ripe for a bounce . It also was trading below the lower Bollinger Band and has come above it in last trading session. The Mid band of 20dma lies near apprx. 5765 .
But the Weekly charts are still in the Sell mode .Hence caution for the bounce and respect for the higher time frame. Observe how the close has been below the Mid B.B. and now can travel down to the lower B.B. near 5200 level ,if doesnt close above 5650 levels on Weekly basis.
2. The Trendlines and Moving Averages plotted on the chart shows how the Upper Trendline being mentioned in the previous posts regularly acted as a big Resistance.The Markets will always travel the Path of Least Resistance. If they cant go up after several bangings on the Trendline, they will have to go Down. The Trendline at bottom connecting the lows since 5177 has provided Support after a whipsaw.
The Prices are trading below both 50dma and 200dma. As mentioned in previous posts that they both are Long term moving avarages and are Bearishly aligned after the Death Cross ,making the Market structure weak. Now the 50dma at 5630 level and 200dma at 5750 will act as Resistance to any upmove.
3. The Prices are due to Retrace the recent Downmove ,The Fibonacci retrace levels act as good Pivot points and Price action near them tells the story. Look how the Moving averages of the 50,100,200dma are aligned near the Fibo. levels giving them extra importance. The zones marked near 5630, 5690 and 5750 will act as likely Resistance.
4. The 5d Volume Profile Chart shows a High Volume node near 5540 level . This level may be the likely SAR for near term trading. Support comes near 5520 and 5460 and Resistance near 5690 .
5. One can follow the Elliott wave Insight giving likely probabilities in short term in the Post - CLICK HERE .This is the basic count being followed .
6. An interesting Pattern looks like being formed ,The Rounding Top , but named 'TOPI' by me as it looks like a cap (and in Hindi 'Topi Pahnana' is a desi slang meaning - To trick someone. This topi looks tailored for the Bulls ). It has a target for 5350 and may reach there quickly.
So , the Weekly trading startegy should have following points covered-
1. The SAR may be 5540 level with supports at 5520 and 5460.
2. Below 5460 its likely to target apprx. 5350.
3. Above 5540 , the immediate Resistances will be at apprx. 5630 and 5690 level.
4. The zone of 5630-50 is a Resistance confluence zone and requires caution .
5. Above 5690 will give a shot at 200dma and test its Resistance.
Have a Profitable Week ahead !!!
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