NIFTY higher highs, RSI lower highs

NIFTY Daily Candlestick Technical Analysis

The post-demonetisation rise in NIFTY is baffling.  Most companies and sectors are struggling, some have gone flat tyre, and still the share market is behaving like it is in an overdrive.  What to believe?  I have done detailed analysis and am basing this on a single but dependable old warhorse, the RSI.

On the daily chart, since mid-Jan, we notice that NIFTY is rising but RSI is falling, each NIFTY higher high corresponds with a RSI lower high.  This is not a good sign about the strength of the market.  I would still be cautious to believe in the market rise.

NIFTY Daily Candlestick Technical Analysis

NIFTY Technical Analysis August - September 2016

NIFTY Monthly Candlestick Chart on 24th August 2016

NIFTY Monthly Technical Analysis

I did this on 24th August 2016.  NIFTY was at 8635 on that day.  The chart is long-term view with each candlestick representing a month of NIFTY's trading activity.

A Fibonacci Retracement is drawn from the market top near 8900 in Jan-Mar 2015 to the previous swing low in Aug-Sep 2013 from where the rally begun that ended in Mar 2015.

We can observe that from the high, the market found support at 6825 near 61.8% retracement of the move.   From this support, the market is moving upwards again.

Using these pivots, I think that 8900 will continue to remain an important resistance level.  The market is near this level today, and so we can expect a big movement upwards or downwards soon.

Downwards, the major support is 6825.  Upwards, the market can move to 11000+ or to 10250 in a smaller move.  These are the pivots for resistance / targets if NIFTY manages to break through 8900 and sustain an upward momentum.

In either case, the market has neared a decision point after many months of green (positive) candlesticks.  We should wait to see what the market does and once it gives a clear indication from 8900, new positions can be entered in long or short.

The market position as of today:



(Charts from Zerodha Kite HTML5 trading platform)

NIFTY Ends Week at Range Resistance (21 Sep 2014)

NIFTY Weekly Market Index Chart Analysis

The S&P CNX NIFTY traveled a range of 235 points during the week, but finally closed at 8121.45, a marginal 51 points higher than its open.

As visible on the chart, the range in which NIFTY is traveling since mid-May 2014 still remains valid, and the market closed on the line of resistance, after falling to the middle of the range during the week.

The weekly candlestick is a Hanging Man.  After last week's Doji at the market top, a Hanging Man is not a very positive signal.  The RSI has remained stationery as well and the divergence is not yet cured.  Higher volume shows improving interest trading in the market.

Will NIFTY breakout from the point of Resistance and jump above, or will it dive back into the range?  This should be observed during the week.

8145 is the resistance level for this week.  This keeps going higher each week as the resistance is a slant and not horizontal.

Unfortunately, NIFTY has fallen below the 6-week steep-diagonal support line.  This isn't a heartening signal.

(1) A strong upward move pulling the index high from the resistance point (8145 is the resistance level for the week) ; &(2) the index closing above the resistance line for 2-3 consecutive days can lead to positive signal if other indicators agree. Unless this happens, do not go in for long positions.


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NIFTY Weekly Market Index Chart Analysis

NIFTY Had An Indecisive Week (14 Sep 2014)

NIFTY Weekly Market Index Chart Analysis

The market fell a minor 0.33% this week, and sustained the support line.  However, it is too close to the support line for us to be relaxed.

The weekly candlestick is not a perfect Doji, but it does resemble a Doji.  This is a signal of confusion in an upward trending market.  Volume has risen during the week but range of market movement was relatively small.  The market seems to be gearing up for a bigger move.

Notably, over the past 17 weeks (4 months), the 14-week RSI is forming a bearish divergence to the NIFTY.  This needs to be watched closely, as either the RSI will rise and match NIFTY; or NIFTY will fall and match the RSI.  The divergence has sustained for quite a while now!

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NIFTY Weekly Market Index Chart Analysis

NIFTY Hits Resistance: Weekly Technical Chart 6Sep14

NIFTY Weekly Chart Technical Analysis

NIFTY closed at its resistance on 5Sep14.

It's be a superman-week for NIFTY - up, up & away!

The index has hit resistance near 8086, the weekly closing on 5Sep14.

The 50-day SMA is happily facing north, volume has fallen but still above the average, RSI is above 70% as well.  All positive signals.

If the index jumps above resistance, we well see some new market high next week.  Otherwise there could be some correction to around 7850 levels before hitting support.

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NIFTY Weekly Chart Technical Analysis

LS Election Results till August 2014 & Current NIFTY Analysis

NIFTY Daily Chart Technical Analysis

The excitement over poll results is diminishing as market is returning to basics. NIFTY has formed a double top near 7968. The candlesticks have shrunk in size. Market has remained at same level since almost 2 trading weeks. Volume has shrunk. Short positions can be taken when market falls from resistance levels. 

Yet, there is a bullish price channel in which the index is traveling and this needs to be watched keenly for breakouts.

This market is currently in a wait-n-watch zone and supports short-term positions, with larger positions to be taken when resistance or support breaks.  

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NIFTY Daily Chart Technical Analysis

NIFTY: Nothing Significant Today

NIFTY Daily Chart Technical Analysis

(Each candlestick represents one daily of stock market activity)

NIFTY closed +50 today and displayed an upward marabozu candle with decent volume, but it still is below the resistance line at 5950.

That is the level to watch out for.  

If it hits 5950, then that would be a good time to play short if the volume lowers and the bar turns red the next day.  But in case it goes above 5950, look for the intensity of the breakout before taking a long position in the market

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NIFTY Daily Chart Technical Analysis

NIFTY Triangle Upto 5950

NIFTY Daily Chart Technical Analysis

(Each candlestick represents one daily of stock market activity)

NIFTY has hit its old resistance around 5950, a resistance level it had encountered back in April 2011.

As we can see on the chart, NIFTY is now climbing in a triangle considering its steep support line and its current resistance.  The chart denotes lateral movement within the triangle until Feb 2013.

Lets see if that is how it goes. 

In case NIFTY breaks the triangle upwards or downwards with increasing volume it would be a good time to take long (on upward break) or short positions (on downward break).

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NIFTY Daily Chart Technical Analysis

NIFTY in 'Grey Zone'

NIFTY Daily Chart Technical Analysis

(Each candlestick represents one daily of stock market activity)

On Aug 23, I posted that NIFTY is expected to rise above 5575.  The resistance is near 5871.  Currently, the NIFTY is into this zone.  This rise is primarily due to the bank rate revision as well as approval of higher FDI in various important sectors of Indian economy.  However, it was as if the candlestick chart aided by some Fibonacci tracing and momentum indicators, was showing an expectation of rise above 5575 much before the govt. declared policy changes.  Somehow, as if, the chart knew!

Today, we can see that NIFTY saw heavy trading and a small fall during the day, indicating that long positions were being liquidated in large numbers.  This, couple with a previous resistance at the same level, could mean that the market might see some more horizontal movement or further fall from this level tomorrow.

Also, two sudden gap ups with increased trading could be some sort of a 'bear trap' - the jump before the fall.  Avoid getting too excited at the moment about the index jumps.

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NIFTY Daily Chart Technical Analysis

Could NIFTY Rise Further?

NIFTY Monthly Chart Technical Analysis
(Each candlestick represents one month of movement)

NIFTY seems to be consolidating over the past few months, moving within a set range horizontally.

The momentum stochastics is showing a cup formation since Aug 2010, and could to cross above the 80% line.

It seems that NIFTY will rise into the gray zone, between 5575 and 5871.  I am calling this the gray zone as one NIFTY reaches here, we would have to study the market very closely to watch out for any signals for the market to move upwards or downwards.  Until then the market should seemingly continue in consolidation mode.


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NIFTY Monthly Chart Technical Analysis

NIFTY Falls Below Support: July 12

NIFTY Daily Technical Chart Analysis:

NIFTY fell below a significant support line at the 5600-5610 levels today.  The market opened gap-down and recovered slightly only towards the end of the trading session.

Since Feb 2011, the 5610 levels have displayed strong resistance, with only occasional spurts above this limit during the past 5-6 months.  Once again the market has fallen below this level and so there might be a tendency to fall further.  The index is expected to be turbulent over the coming few days.  Until it goes about 5610, avoid taking any long positions on NIFTY.

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NIFTY Daily Technical Chart Analysis

NIFTY Outlook for the Week July 4 - 8, 2011

NIFTY WEEKLY TECHNICAL CHART ANALYSIS:

This has been a good week for NIFTY, after it bounced back creating a hammer formation from the dreaded 5200 level in the last week.  However, the next week can be difficult and the index could fall again.

You can see that there is a line of resistance which is applicable since Nov 2010, i.e. 7 months ago.  This makes it a strong line of resistance to reckon with. 

The index reached this line of resistance twice and then fell back again.  Out of these previous two times, it tried to break above this line for an entire month in the Apr-May 2011 period but couldn't do so and fell back again.  You can see that all the weekly highs during that period touched the line of resistance but failed to rise above it.

Now again for the 3rd time, the index is about to reach this line of resistance and will meet it around 5717.  This is an important point to watch out for.  If the index rises above this level then we can look at a positive movement in the coming weeks.  However, if 5717 is not breached and the index falls below, then we would ideally expect it to head towards 5350 and then 5200 before making any further movements. 

For now, wait and see what happens at 5717 before making any important trade decisions.

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NIFTY WEEKLY TECHNICAL CHART ANALYSIS

NIFTY Outlook: Where is the tricky index headed?

NIFTY Daily Chart Technical Analysis:

As the chart predicted last month (see my previous on NIFTY), 5500 has been an important level throughout May and June.  The index remained around this level initially and then fell to the 5200 level.

Why is 5200 important?  

The market has reached this level for the 3rd time since July 2010 (almost an year ago).  Last time was in Feb 2011, when the market dipped below 5200 briefly but rallied back upwards. This time again, the market has reached 5200 and has now shown signs of support.

Two more patterns have emerged.

The first is another important support at 5350.  Remaining above this level is a good sign as you can see in the chart.  While 5200 has served as a bottom, 5350 has served as the stronger support level over the past year.

Another is the diagonal set of parallel lines of support and resistance for the short term period since May 2011.  The line of support passes through 5200 just where the market dipped to this level in the current week.  This makes 5200 a very important level in the current week and that the market has shown support and remained above 5200 is a good sign.

Moreover, the volume has consistently lowered throughout the year and the current weekly volumes are atleast 50% or less as compared to a year ago.  The volume has progressively fallen.  This is showing a lowered interest in the market at the current rates.  This could be a sign that the market is readying for a move soon.  

For the time being it does seem like the market will rebound towards the higher levels after sputtering to a bottom of 5200.  But in the longer term, it is still doubtful if the market will be able to sustain above this level considering the socio-economic and political situation in India.  Defer from making long term decisions right now and trade for the shorter term, and beware of any fall below 5200 as this is an important support level.

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NIFTY Daily Chart Technical Analysis

NIFTY Near Its Support Line

NIFTY Daily Chart Technical Analysis:

NIFTY has been falling since the past few days as expected (Check my previous post on NIFTY to see we had expected this fall).  It has finally reached near its support line. 

The 5500-5550 is an important level and NIFTY is expected to bounce back from here.  If it bounces back it might be a good time to expect a bull run.

But if it falls below 5500 and closes below this level for a couple of days, then we might face a further fall and it might take a while for NIFTY to recover.

The next couple of days will be important in taking a positional call on NIFTY. 

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NIFTY Daily Chart Technical Analysis

NIFTY: Rises But Still Not Convincing

NIFTY Daily Stock Chart Technical Analysis:

• NIFTY tried to rise back today and closed at 5520. 
• However, this rise is not looking very convincing as a tasuki gap has formed and momentum and volume have also slowed down.
• Wednesday might come with an opportunity to go short.  Wait for market open and see the direction where its headed before taking a decision.   If it goes upwards, wait before taking short positions.
• NIFTY आज थोड़ी ऊपर गयी है लेकिन अभी भी लगता है की गिर सकती है.  कल शोर्ट करने का मौका हो सकता है, ध्यान रखना. 

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NIFTY Daily Stock Chart Technical Analysis



NIFTY Post-Budget Day

NIFTY Daily Chart Technical Analysis:

NIFTY had a soaring day.  It defied what the indicators were saying yesterday, but I would still not consider that the market is out of the woods.

It stopped at its diagonal resistance today after a lower volume high jump.  Emotions are flying in the air after the budget, so the market is showing volatility.  By the end of this week the emotions should settle down and NIFTY should show a definite direction.

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NIFTY Daily Chart Technical Analysis

NIFTY on Budget Day

NIFTY Daily Chart Technical Analysis:


NIFTY behaved very erratic on budget day, and after an initial spike, got dumped and returned to close near its open.

Close & CMP: 5333.25

Market Outlook:

• The index showed no interest in rising back and all the indicators are still pointed downwards.
• Might have a slow day tomorrow considering the large movement today.  Also, investors will remain confused over the actual implications of the budget and so might move in either direction.
• निफ्टी आज शुरुआत में उछला लेकिन दिन के अंत में फिर गिर गया.  कल थोडा धीरा दिन जाने की सम्भावना है.  आज का उतार चढाव यह बता रहा है की मार्केट अभी ऊपर जाने के मूड में नहीं लगता है.  

Technical Indicators

• A long legged doji was formed and the day closed with heavy bearish control.
• The market briefly rose above its previous support at 5415 but then fall back again.
• Current support is at 5227.

NIFTY Daily Chart Technical Analysis

NIFTY Slides Below Support

NIFTY Daily Chart Technical Analysis:

NIFTY had a high-speed slide today and broke below its previous support at 5415.

Close & CMP: 5262

Market Outlook:

• The index has fallen with high power today.  It seems like this could fall even further.  Buy any stock with due caution. 
• Support can be expected at 5227 and then at 5110. 
• निफ्टी आज फिर से गिरा है.  और लग नहीं रहा है की वापिस ऊपर जाने का इसका अभी तुरंत कोई इशारा हो.  संभल के खरीदना. 

Technical Indicators:

• A heavily traded day that ended in a bearish Marabozu, and also created an island reversal type of formation. 
• The momentum has just started going downwards and has some distance to travel before it reaches the overbought levels.  
• All this put together is suggesting more fall; maybe its the anticipation to the upcoming budget.

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NIFTY Daily Chart Technical Analysis

NIFTY: Didn't Break Resistance

NIFTY Daily Chart Technical Analysis:

NIFTY today had a fall again.  I was expecting this to happen next week but it happened a day sooner.

Close & CMP: 5459

Market Outlook:

The index reversed today after 5 days of rise.  

Technical Indicators:

The momentum showed a slow down today as compared to the previous days and a bearish engulfing candlestick pattern was formed.  Both negative signal.  But the weekly chart momentum has recently shown a rise which is a conflicting signal.  Let's wait a day or two for the final decision on which way this is headed.

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NIFTY Daily Chart Technical Analysis

NIFTY: Might Hit Resistance Soon

NIFTY Daily Chart Technical Analysis:

NIFTY made a rise today, continuing a positive week for the stock market.

Close & CMP: 5546

Market Outlook:

• NIFTY might remain sideways tomorrow, and Monday-Tuesday could see a big movement in either downward or upward direction, with a higher probability of downwards.
• निफ्टी कल शांत रहना चहिये, और सोमवार या मंगलवार को गति दिखा सकता है.  ज्यादा सम्भावना है की तब फिर नीचे की और जायेगा.

Technical Indicators:

• The market showed good recovery today but the momentum is rising very fast and could soon hit upside and tumble back. 
• 5627 is the resistance and 5415 is the support for NIFTY.
• Closing above 5627 is a very positive sign.

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NIFTY Daily Chart Technical Analysis