Nifty 50 Analysis: Drawing a plan of action

Dear Readers,

With the festive season behind us and the elections ahead, the market is in a lull state. Many are talking about 'action' coming back as elections draw closer and given that, it is only prudent to have a plan of action ready.

I have presented the hourly chart of Nifty50 below for analysis, but before we begin I would like to draw your attention to the indicator I have primarily used for this analysis.

Over the past few months, I have figured a new moving average about which you will not have heard anywhere else. This exponential moving average is exceptionally long, but works beautifully on daily and hourly and even shorter time frame charts. The 600 EMA is 3x longer and 3x smoother than our favorite 200 EMA, and if you listen to me, this will soon be your 3x favourite too. You can use the 600EMA label to search my blog for other posts mentioning this magical moving average and deciding the effectiveness of this underrated moving average for yourself. 

Coming to Nifty now. In the chart attached below, the red arrows are clearly marking the resistance which the 600EMA  has posed for Nifty on every rally. The one instance when the 600 EMA was breached was apparently an instance of a fake breakout. The ascending triangle visible on the chart is capped by 600EMA and upward trendline is providing it support. This is a classic ascending triangle. Now this is a continuation pattern. 

The market as I see it now is quite weak. The first support has been touched. A sustained breach of 10770 on closing basis would take the index to 10540 and also mean failure of the pattern which will lay the ground for deeper correction. I am betting on the failure. 

However, if the pattern succeeds, then on the event of a strong upmove above the 10870 level , with a closing on the daily chart , a proper throw back and subsequent continuation should take Nifty up to 11750 again. 

Nifty Hourly chart, captured on 10-01-2019

That is from my side on Nifty. Please do share your outlook on the index and the general direction of the market. I have been bearish since 11700 level. I was bearish at 10600 also and I will continue to be bearish till nifty does not break the 10000 level!

Disclaimer: I am holding a Nifty JAN 10300 Put. 

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Nifty 50: 600EMA poses as major resistance on hourly chart

Hello Readers!

Here is a quick analysis of the hourly chart of Nifty. I'm being honest when I say the short covering rally witnessed in the index in the past three days was nothing less than a shocker. I has been short on Nifty from the 10950 level having spotted the end of Wave B just in time. However (call it complacency) I did not atall look out for a potential support on the chart when the index started falling from 10950 and wiped out nearly 600 points. Having patiently seated out this rally I can see a resistance on the chart. RSI has also has the chance to breath and climb up to the 60 level. The only worrying factor is that RSI crossed the level of 60 yesterday, which is something I was hoping would not happen. 

Irrespective of that I will look at the bigger picture and bet on Nifty going ahead and finishing the Wave C. The chart analysis is attached below.

Please feel free to share your views. You can revert in the comment section of email me kchamaria1993@gmail.com

Nifty50 breaking the floor! Follow up on the successful bear call

Hello Readers!

I previously posted an article  on Nifty50 titled- The Doji is here, and its bear-ly a good news (posted on 30th Nov 2018) wherein I wrote about the reasons why Nifty could turn lower (technical based) and it did!

Therefore, I would like to follow-up on the analysis. 

The below mentioned chart details out the probably support areas, the first one can confidently be said as achieved even before the market opens in the face of the RBI governor's resignation. 

One way the above analysis differs from the previous analysis is the level of the 600EMA. Previously the 600EMA stated a level of around 9754, however it has changed and now stands at 9950. Despite of the support level moving higher we cannot completely discredit the importance of moving averages as important support and resistance zones. 
I would like to go ahead and emphasize that the 600EMA in my opinion is only a potential target level and not the bottom. I strongly believe the correction will go deeper irrespective of the events like election results, President Trump's trade war inflicting policies, OPEC issues getting resolved, currency an interest rate. Interconnected as they all are, the signals of weakness and deep correction have already been given long ago. 

I will not elaborate on this right away. It is better to take one step at a time and go from one level to the next rather than factoring in extreme levels before hand and taking up ill judged positions in the market. 

Few stocks that I have posted about in the past that look good are as follows:

YesBank- https://kavitatechnicalanalyst.blogspot.com/2018/12/yes-bank-giving-strong-technical-signal.html
KPIT- https://kavitatechnicalanalyst.blogspot.com/2018/12/keep-it-moving-kpit-is-set-to-roll.html
Balrampurchini- https://kavitatechnicalanalyst.blogspot.com/2018/11/balramurchini-and-bata-india-stock.html ( I am very eagerly waiting for price to fall to 90 levels so I can reenter) 
Britannia-https://kavitatechnicalanalyst.blogspot.com/2018/10/look-at-britannias-shares-your-evening.html (already run up 15% since the post)

There are a few more names that you will find when you browse through my blog Wishing you luck!

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