Oct 202011

Nifty(5139): Tuesday's sell off was completely neutralised and once again the focus has shifted back to the critical 5175-5200 zone. It is always important to keep an eye on where we are in the larger trend. So, here goes:

Nifty Daily Charts

We already know that in the medium term the bearish trend does not have a problem as long as Nifty stays below 5330. The structure marked on the chart is what is called a "flat" which has a tendency to exceed slightly above the high of "a". The 50% fibonacci retracement point of the move from the Aug high is at 5230 and we might want to keep this as important level for reversals.

The alternative view is that, what if the point we have marked as "b" is actually a truncated 5th? One of the long-term possibility is that the bulls are back for the long-term (Nifty should exceed 5177) - this seems pretty incongruous based on several measures I follow. While you need to be aware that such a scenario exists, you might also want to be aware that this rally could extend to the 200DMA (about or the blue trend line shown on the chart (5400+ zone) and still be in a bear market. We will be using a different count in that case. We will discuss on a separate post when the need arises with charts and the works.

So it is important to understand that we should NOT make any large commitments on either direction of the market. Keep your positions to a manageable level.

The Euro seems to have put in an important secondary high 2days back and with a tight correlation with global stocks over the last few months this is going to be an important thing to watch out for. A decline to 1.3550-1.3575 seems likely and anything below that would mean that fuel for the bulls have gone empty.

Nifty short-term: Watch out for 5110-5085. Below this zone a quick 50 point decline could come through. If any intra-day traders out there, you might want to pay attention to this.

On CNBC, today at 8:20 IST.

 Posted by at 12:37 am

  7 Responses to “India pre-market Oct 20th”

  1. Yesterday’s open low for nifty was 5070…would that be a support?

  2. Brilliant just brilliant…nifty 5033.2…covered all…next? :-). 😛

  3. Jai Bala,

    That is a perfect call (Nifty short term). Give us those kind of calls every now and then.

    Agiletrader, Jai Bala should charge you double than what he is charging to us.

  4. excellent call

  5. Double or more, he is worth every penny…just wait and see…he is just getting started…:)

    • Agiletrader,

      You are absolutely right. But as Jai bala once mentioned it is always difficult to pull a trade on others opinion. Do not you think so? 😀


  6. Jai Bala,

    This is your best and well documented post on Nifty and the possible scenarios. (For me this is by far the complex scenario nifty throwing at me in five years. I do not know I am the only one feeling the heat).

    Many a times I came across these kind of scenarios but out of excitement to gain profits I moved early in to trades and burned money in whipsaws. By the time actual scenario begging to take a position I lost money and heart to take position. This is the story of my trading 🙂

    ‘Never preempt the market’. Jai bala, I heard it loud and clear. This time I am going to follow you how to pull a trade.


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