I was getting a lot of Requests to post my views on Nifty and what is expected move in this index. I am not a So Called Market guru whose forecast are based on total guesswork, Being a certified expert, I am pretty sure on my work and I hope it will give you a lot of guidance.
Before that, I need to LEGALLY BIND to code of conduct and state this Disclaimer here:-
These are my Thoughts and not a Paid Professional Advice, you are solely responsible for all your acts after reading this analysis. ~ Jyoti Bansal ( Certified Technical Analyst, NCFM )
Again this expiry seems to close in the same range.
Nifty is range bound and moving sideways since November 2018. The current range of Nifty is 10,650 to 11,100 and within this range we also got a Fibonacci cluster near 10,880 level. This Fibonacci cluster is providing a strong resistance zone to the prices and in this zone we got 5 bearish reversal patterns on hourly chart.
At the break out of each reversal pattern it was a signal to go short and Nifty hit the target each time.
The first reversal pattern was the Head and Shoulder pattern and its target was achieved near 10700 level.The Head and Shoulder pattern is a bearish reversal pattern and it is found at the top of a uptrend. On hourly chart, at the breakout of Head and Shoulder pattern we got a signal to go short at 10,820 level. it was a gap down opening and the opening candle was the bearish candle. so it was a strong signal to go short. The target of this reversal pattern was 10,720 level but it was a fall up to 10,340 level.
The second and third reversal patterns were Double Top pattern and the targets were achieved in these patterns too. Double Top pattern is also a bearish reversal pattern and in this pattern we get two peaks at the same price level. At the break out of neckline we can go short and In this pattern the minimum target is 1:1 R:R. But here we got a 1:4 R:R.
Fourth and fifth reversal patterns were again the Head and Shoulder patterns.
In all these patterns targets were achieved so this zone (10,860 to 10,930) is acting as a strong resistance zone. The upper resistance level of the Nifty’s current range is 11,100 and the lower support level is 10,650. The next support zone is near 10,350 level and the next resistance level is near 11,400.
In this period we also got three bullish divergence signals on RSI indicator.
In bullish divergence, prices make lower lows but RSI makes higher highs. When RSI was giving a bullish divergence, it was in the oversold region and when prices are range bound, a divergence is a very strong signal to enter a trade.
Today Nifty opened gap up and it was a move up to 10,930 level but Nifty was unable to hold that zone and slide down up to 10,750 level. Here RSI was giving a negative divergence on 15 minute chart.
So in the time period of these three months, we got six sell signals (in which five bearish signals were achieved by reversal patterns and one sell signal was achieved by bearish divergence) and three buy signals (by bullish divergence).
On weekly chart, Nifty is making a rising wedge pattern that is a bearish pattern. But pattern is incomplete and we should always wait for the completion of the pattern before making a position based on chart pattern’s signal.
If we get a breakout of this pattern in downside, Nifty may fall up to 9,800 level but if Nifty move higher above 11,200 and breaks the pattern in upside, we can see a fresh uptrend in Nifty 50. Till then we can trade the current range on hourly chart.