Plan

How I see the week ahead…

Jun21-W4: Sky is the limit for this week (Jun28 to Feb2)?

Nifty Index 50 did slip below my green trendline only to claw back. Despite the gap openings, Nifty continued to remain within a defined range. It couldn’t break the red box but it did not go down either and thereby, vindicating my last week’s theory of consolidation.

Now, here’s what I am looking at:

Despite the negative divergence and hit from red box, Nifty continues to hold itself quite well. It is resilient to any downward movement. Moreover, banknifty has joined the party with fireworks. Thus, my bias is on upside with a big movement coming up. But I have this big red box on top which is Fibonacci extension of Nifty’s upward trend since last year. Fibonacci is always subjective but I believe 16200 should give resistance for now.     

Thus, scenarios for the week ahead (highlighted as yellow box with black lines dissecting scenarios)…

ScenarioProbabilityAnticipated Price Action
ConsolidationMediumBetween 15925 and 15650
DowntrendLowIf breach below 15650; to drop somewhere till 15450
UptrendHighIf breach above 15925; to rise somewhere till 16200

If this upward move happens, it might be nothing but part of the failed breakout which I have been anticipating for quite some time now. Basically, Nifty might breakout above the wedge (drawn as combination of red and green trendlines) only to fail. Let’s see.

DISCLAIMER: I am not a SEBI registered adviser. All the information provided on this website is for educational / informational purposes only and should not be taken as investment advice.

Jun21-W4: Nifty to consolidate this week (Jun21 to Jun25)?

Being right is one thing, being right to the decimal is awesomeness. Nifty somehow traded exactly between the black lines which I drew for last week, though I would have preferred it to break 15650 and fall to 15450. But it does give me confidence in my technical analysis skills. The unanticipated surprise though was Monday with Adani news breaking the internet and charts.

Now, here’s what I am looking at:

Nifty 50 index looks sandwiched and most likely it is going to stay that way at least till first half of the week. If the green support line is broken, we can see it slip to or below 15450. I continue to hold downward bias since I believe RSI needs to cool down and touch the support trendline.

Thus, scenarios for the week ahead (highlighted as yellow box with black lines dissecting scenarios)…

ScenarioProbabilityAnticipated Price Action
ConsolidationHighBetween 15925 and 15450
DowntrendLowIf breach below 15450; to drop somewhere till 15250
UptrendLowIf breach above 15925; to rise somewhere till 16100

There continues to be a lot of skepticism around Adani group shares and if they are being manipulated via fund houses. Hopefully, the news has been accommodated and there should not be any surprises. The bigger news is Fed increasing rates which means flight of capital from emerging markets is on the cards.

DISCLAIMER: I am not a SEBI registered adviser. All the information provided on this website is for educational / informational purposes only and should not be taken as investment advice.

Jun21-W3: Nifty to give failed breakout this week (Jun14 to Jun18)?

I was anticipating that Nifty would go above the red trendline only to revert back. It did happen but everything was super slow. Lack of momentum did not let Nifty break 15600 and so the week simply died in a bullish consolidation.

Now, here’s what I am looking at (I have changed EMA & RSI settings as compared to last charts):

Timing of future price action is not something I am good at. My theory of failed breakout did not quite materialize last week but I still have the same bias. Therefore, my target for now continues to be the green rectangle around 15450. For that to happen, 3 trendlines would need to be broken but RSI divergence should take care of it.   

Thus, scenarios for the week ahead (highlighted as yellow box with black lines dissecting scenarios)…

ScenarioProbabilityAnticipated Price Action
ConsolidationMedBetween 15900 and 15650
DowntrendMedIf breach below 15650; to drop somewhere till 15450
UptrendMedIf breach above 15900; to rise somewhere till 16050

There was just 1 high range candle last week. Let’s see if the fall happens this week. Option buyers would still need to time it properly. And since I lack that skill, I would prefer to sell call options if I can squeeze some free time from office.

DISCLAIMER: I am not a SEBI registered adviser. All the information provided on this website is for educational / informational purposes only and should not be taken as investment advice.

Jun21-W2: Nifty Index 5- to revert to mean this week (Jun7 to Jun11)?

Beginning last Monday with a high range bullish candle, Nifty continued its upward momentum. In such a scenario, my target for Nifty was 15650 but it even breached 15700. I can’t complain much as it is always tough to give a target when skies are clear. And well, Nifty did close the week at 15650 anyway.  

Now, here’s what I am looking at:

I now have a hard bias for mean reversion as this is the kind of setup wherein I like to sell call options. It is entirely possible for Nifty to go above red trend line but that would be a fake breakout. My target for now is the green rectangle around 15450.    

Thus, scenarios for the week ahead (highlighted as yellow box in chart)…

ScenarioProbabilityAnticipated Price Action
ConsolidationMedBetween 15600 and 15850
DowntrendHighIf breach below 15600; to drop till 15450
UptrendLowIf breach above 15850; to rise but not by much

The daily ATR of Nifty has been declining steadily and may bottom out in a couple of weeks. Low ATR is a pain for option sellers as they make safe money but not much money. Things shall become interesting when ATR turns its head upward again.     

DISCLAIMER: I am not a SEBI registered adviser. All the information provided on this website is for educational / informational purposes only and should not be taken as investment advice.

Jun21-W1: Nifty to consolidate this week (May31 to Jun4)?

Though I have not been able to find time to trade Nifty mainly due to office work, I could not resist making a brief analysis for this week especially since Nifty has hit ATH. Congratulations to those who stayed invested.  

Now, here’s what I am looking at:

Saying that Nifty has broken previous ATH would be a call made too soon. This week is crucial to see if Nifty has broken the red resistance rectangle.  

Thus, scenarios for the week ahead…

ScenarioProbabilityAnticipated Price Action
ConsolidationHighBetween 15500 and 15250
DowntrendLowIf breach below 15250; to drop till 15100
UptrendLowIf breach above 15500; to rise till 15650

Lingering around ATH levels is always a very tricky situation and I personally think Nifty is far away from its averages and thus, revert to mean is a good possibility. RSI structure too is a bit confusing. So, consolidation should be the name of the game, this week. Let’s see.

DISCLAIMER: I am not a SEBI registered adviser. All the information provided on this website is for educational / informational purposes only and should not be taken as investment advice.

May21-W1: Nifty correction due to failed triangle breakout (May3 to 7)?

I have to admit that I got it wrong last week. Since Nifty was always somehow taking support from 14200 (happened 3 times), I should have written that probability of bounce was higher. Even RSI with its divergence was hinting this. Even then, I would never have expected range of bounce to break triangle by such a huge margin. At the end of week, Friday played spoilsport bringing Nifty back inside triangle.   

Now, here’s what I am looking at:

My bias is on downside as I believe that this is a pattern failure. I expect coming week’s price action in the yellow highlighted box

Thus, scenarios for the week ahead…

ScenarioProbabilityAnticipated Price Action
ConsolidationHighBetween 14250 and 14850ish
DowntrendHighIf breach below 14250ish; to drop till 13850ish
UptrendLowIf breach above 14850ish; to rise till 15050ish

Even Nithin Kamath was amazed by the rally witnessed last week. The disconnect between reality and market continues but I guess this market is a function of liquidity and not of fundamental factors. In any case, I am neither a fundamental analyst nor an expert at expert analysis. And then there is this disclaimer anyway 🙂

DISCLAIMER: I am not a SEBI registered adviser. All the information provided on this website is for educational / informational purposes only and should not be taken as investment advice.

Apr21-W5: Nifty to drop below triangle this week (Apr26 to 30)?

Red openings have been opening for 3 Mondays in a row now. The difference last week was that there was a gap down which was filled to a large extent on Tuesday. Overall, Nifty did not ‘move’ much but over the past 3 weeks, it has been steadily going down.

Now, here’s what I am looking at:

Though Nifty has been failing to break the triangle, my bias is on downside since Nifty is below the moving averages and I expect coming week’s price action in the yellow highlighted box

Thus, scenarios for the week ahead…

ScenarioProbabilityAnticipated Price Action
ConsolidationHighBetween 14150 and 14550ish
DowntrendHighIf breach below 14150ish; to drop till 13800ish
UptrendLowIf breach above 14550ish; to rise till 14800ish

I wonder how this Monday will begin. Will it break the pattern of past 3 Mondays by opening in green? But if it does so, will the rest of days go in red? It should not feel bad to see Nifty levels travelling towards realistic levels. The party has gone far too long and far too loud.    

DISCLAIMER: I am not a SEBI registered adviser. All the information provided on this website is for educational / informational purposes only and should not be taken as investment advice.

Apr21-W4: Nifty trapped in triangle (Apr19 to 23)?

Last week was almost a replica of prior week, though the momentum was larger this time. Monday again was a red day but RSI signaled bullish divergence. This led to ascent during remaining days forming yet another doji on weekly timeframe. Thus, my hypothesis of weekly consolidation stands vindicated for 2 weeks in a row now (everybody writes such arrogant statements on twitter etc, why not me? 🙂 )

Now, here’s what I am looking at:

Nifty is now in a triangle and I expect further consolidation this week in the yellow highlighted box unless there is a breakout from triangle in either direction

Thus, scenarios for the week ahead…

ScenarioProbabilityAnticipated Price Action
ConsolidationHighBetween 14250 and 14850
UptrendLowIf breach above 14850ish; to rise till 15000ish
DowntrendMediumIf breach below 14200ish; to drop till 14000ish

With last 2 Mondays being big reds, it would be interesting to see how this week begins. Such occurrences affect traders psychologically causing emotional biases. Furthermore, the continuous flow of negative news can also invoke bearish views. It becomes all the more important during times like these to focus on price action only.    

DISCLAIMER: I am not a SEBI registered adviser. All the information provided on this website is for educational / informational purposes only and should not be taken as investment advice.

Apr21-W3: Nifty consolidation to continue?

Even though Nifty began last week with Covid fever, the recovery was equally brilliant and by Friday, we are back to where we started. At an overall level, I can safely claim that my prediction of consolidation with a mix of red-green candles was correct (more details here). However, the manner of consolidation took me by surprise. I am sure it would have caused a lot of trouble for traders as well.

Now, here’s what I am looking at:

Nifty is clearly consolidating in a range, highlighted as yellow box. But since price is above averages, the bias is on the upside.

Thus, the following are scenarios for the week ahead…

ScenarioProbabilityAnticipated Price Action
ConsolidationHigh14550 to 15000
UptrendMediumIf breach above 15050ish; to rise till 15300ish
DowntrendMediumIf breach below 14500ish; to drop till 14200ish

I personally don’t think that the continual rise of covid cases over the weekend would cause a red opening since that factor was already accommodated last Monday. However, if states like Maharashtra impose lockdown, it can trigger selling. Let’s see 

DISCLAIMER: I am not a SEBI registered adviser. All the information provided on this website is for educational / informational purposes only and should not be taken as investment advice.

Apr21-W2: Nifty on the rise?

I wonder how many people were actively trading the markets last week. With Holi and Good Friday cutting length to 3 days only, trading would have been a light affair. It seems Nifty too was keeping it cool. Green on first day, red on second, and back to first day high on third day. Good for investors but traders might have felt the churn.

With the candles hovering around moving averages, it is tough to say if we are in uptrend or downtrend though my bias is on the upside. Time will tell if RSI breakout is good enough for price to stay above trendline.

Scenarios for the week ahead…

ScenarioProbabilityAnticipated Price Action
ConsolidationHighIf rise till 15050ish; to stay above 14850ish
UptrendMediumIf breach above 15050ish; to rise till 15350ish
DowntrendLowIf breach below 14650ish; to drop till 14350ish

Thus, I am going to begin by selling puts unless I see a red opening on Monday and adjust positions as days unfold. I am expecting that like last week, we may see mix of green and red candles this week.  

DISCLAIMER: I am not a SEBI registered adviser. All the information provided on this website is for educational / informational purposes only and should not be taken as investment advice.