Nifty showed strong rise in last 2 sessions from 11140 to 11845 level. Prior to that sentiments were bearish, so was this rally predictable? Well, Markets were providing clear indication for the upcoming rally which was confirmed on last Friday itself i.e 17th May 2019.
The Massive Monday: Market cheered up Exit Poll which suggested that Mr. Modi is going to form Government again with majority. Nifty had a massive Gap up opening of more than 250 points. Post that also market continued to move higher throughout the day and made a high at 11845 level which is just inch away from the life time high of 11856 level. Nifty gave positive confirmation on Friday itself when it closed near 11400 levels. We were mentioning the zone of 11300-11350 from last few reports and market respected that very well. As the crucial resistance zone took out, market blasted on upside in yesterday’s session. It is simply amazing to see such huge confirmation from market itself ahead of crucial event of Exit polls.
Nifty zoomed in last session with a gain of 3.69% and arrived close to the earlier the high of 11856 levels. So what to expect next? We have shown below part of Equity research report which was published in the morning of 20th May 2019.
Nifty 60 mins chart: (Anticipated on 17th May 2019)
Nifty 60 mins chart: (Happened on 20th May 2019)
(Part of Equity Research Report)
“Nifty finally broke out of the consolidation pattern in Friday’s session and closed on the positive note with the gains of 150 points. The important thing to note down is that it has decisively given the close above 11300-11350 region which suggests that bulls have taken the control now. Broad based participation was witnessed apart from IT and Pharma sector which closed in red territory. Auto, Financial services and FMCG were the sectors which gained in between 2.40% to 2.50%. Now we are in to the Election results week which is going to be on 23rd May 2019. The daily close of 23rd May as well as weekly close will play important role for trend guidance. Thus one should not leverage high and should take light positions with strict risk management.
The Battle: The above daily chart shows that battle between bulls and bears finally got over and Nifty managed to regain the level of 11400 levels on closing basis. In the current market environment, trader must follow discipline along with flexibility to be in the market trend. One should not be having any biased strategy otherwise it can be dangerous.
Momentum, Bar technique and Moving averages: Prices have given close above the prior bars high along with strong momentum for the first time after the selloff witnessed for 11 sessions. The formation of bullish candlestick pattern suggests that daily bias has turned positive. Hence the low of 11259 will act as crucial support. It has managed to give close above 5 and 10 days of EMA which is positive sign. RSI has crossed above 10 days of SMA which was not taken out in entire fall. Such confirmation from the oscillators indicates further positivity. Nevertheless, this week is going to be crucial for traders and investors.
Validity of breakout: The 60 mins chart shows that zone of 11300-11350 has been taken out with strong momentum which suggests that prices have completed minor wave c of Flat correction pattern and the nature of rise going ahead will guide us further for the internal wave structure. For this current upside breakout to hold, prices need to protect 11300 on closing basis which will act as support as per polarity reversal.
Conservative Target: In short, Nifty has given upside breakout from the consolidation pattern. However we would advise to trade with light positions due to Election results. On downside 11300 will act as crucial support. Post pattern implication of double correction pattern can lead to 61.8% retracement of the down move which is placed at 11530 level.
The above research clearly suggests that we were mentioning the zone of 11300-11350 level from last few days to our clients. The close above 11300-11350 lead to strong rally and market opened with Gap up activity at 11650 levels, achieving our first target of 11530-11550 levels. We always suggests for trailing stop method so that most of the trend can be captured along with disciplined approach.
This was the trailer and actual results are due on 23rd May (This Thursday) which is going to create huge volatility. In such times it is better to keep in mind crucial resistance and support area so that one can avoid any surprises!
You can also subscribe to our Nifty, Intraday, Positional calls services. We gave the following calls when Nifty broke 11300:
9:20 am- NIFTY FUT BUY ABOVE 11319 SL 11249 TGT1 11354 TGT2 11424
12:05pm- NIFTY FUT BUY CALL GIVEN TGT 1 ACHIEVED AT 11354
3:06pm- NIFTY FUT BUY CALL GIVEN TGT2 ACHIEVED AT 11424
11:29 am- NIFTY FUT BUY ABOVE 11718 SL 11638 TGT1 11758 TGT2 11838
12:37 pm- NIFTY FUT BUY CALL GIVEN TGT 1 ACHIEVED 11758
3:07- NIFTY FUT BUY CALL GIVEN TGT2 ACHIEVED AT 11838 AND HIGH MADE NEAR 11877
Subscribe for the above call services and get research reports along with it. Get access here
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