Nifty July Article.

Greetings friends !

I thank you once again for being a regular reader of my views and showing great interest on my article. This encourages me to keep writing the articles for you reference. Today in this article, I am going to share some important views on Nifty (daily) chart on the basis of Technical Analysis.

1.Nifty Daily Chart.

As we have witness a sharp fall in Nifty on Friday of -1.53% or 177.65 Points down (cash level) it has formed a Bearish price pattern called Sideway Breakdown (Chart-1) with volume which is more than 30% of the Previous day. We might witness a downfall till 11200-11150 in short term, also we can expect on the upper side if it close above 11600 on end of day basis, then this price pattern will be ruled out and we will take review at that time.

After touching it’s all time high of 12103.5 on 03-06-2019 it was observed that nifty started making the lower top lower bottom formation in short term and thus picture was pretty much clear that it will compensate the hollow pocket which was there as you see in (Chart-2). Looking at the chart from October 2018 we have witnessed Higher Top & Higher Bottom. From Chart-2 one can easily understand that Nifty has always tested its Support Line and from there it has bounced back. The Support Line which it was respecting, has been compromised on Friday indicating some sign of pain we might witness in Nifty in the coming days.

 Just For Info.
If we study the Past data on monthly chart basis of Nifty from 2008 till 2018 we experienced a correction of approximately 25% and after testing the support it rallied to almost 45% which is constantly happening from 2008 to 2019. But now when Nifty tested its high of 112103.65 it failed to maintain above that level. Following table will elaborate the moments of correction from High to Low of respective month & Year.

Following is the chart attach showing the consolidated data of above table.

So seeing from past data we can understand that after every correction nifty has given outperforming returns. In this situation, many people panicked and booked losses due to which they could not take advantage of next rally.

As per my observations  I have derived a conclusion that some of the stocks have  outperformed irrespective of Nifty was experiencing a Correction phase or was in Upward Move. From the above Chart-3 it is clearly indicating that Nifty is in "UP Trend" which mean Current top is higher than previous top and current low is higher than previous low.

Now few questions will bother your mind, as to what level it will experience it's next correction, or when it will reverse. As per my view it might test near 11200-11150-11100 level on Daily Chart. But on the Contrary if its Close is above 11600 then this correction will be ruled out. If you find this article useful Do Share your Feedback as your one feedback might be helpful for many others to understand the market and minimize their loss.

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Author:-

AFP Chirag R Sanghvi (Certified Research Analyst)

E:- chirag.sanghavi89@gmail.com

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