Nifty (Close approx. 9710.8): Nifty after making a lifetime high of 10137.8 in the month of August has corrected more than 4% since then. Nifty is presently standing at a very crucial level of 61.8% retracement (presently at approx. 9712) of the last rise from approx.9449 to 10138. Nifty is firmly bearish in hourly and daily timeframe but a sharp pullback may take place if Nifty sustains above 9774.
Nifty opened gap down in Friday’s session, bounced and again came down to close at 9710.8. Presently in the hourly time frame, the market is below most short term moving averages. The next probable support in the hourly chart comes at lower Bollinger line (presently at approx. 9660.1) and 78.6% retracement of the last move form approx. 9449 to 10138, (presently at approx. 9596.2). The probable resistance comes at 13 Hour moving average (presently at approx. 9773.8) and 20 Hour moving average (presently at approx.9817.9).
The hourly CCI, RSI and stochastic are still bearish and are in oversold zones. Moreover, the rising ADX line also suggests downside momentum in the hourly price chart is very much in place. Overall Nifty remains bearish in the hourly time frame.
Fig: Nifty Hourly Chart
In the daily time frame, Nifty has closed below 50 DMA (presently at approx. 9774.7) for the first time in last 7 months. The candle formed in daily chart, however, may halt the sharp downtrend if there is a gap up opening and a follow-up rally.
Nifty is still bearish in the daily time frame and the next probable support in the daily chart comes at 100 DMA (presently at approx. 9538.1) which is a very crucial support and 61.8% projection (presently at approx.9473.6).The next probable resistance in the daily chart comes at 50 Day moving average (presently at approx. 9774.7) and 5 Day low EMA (presently at approx. 9828).
Daily slow stochastic and RSI are still downward facing and trying to reach their lower bound. Moreover, daily CCI has closed below -100 line which suggests that bears are in control .
Fig: Nifty Daily Chart
There is a big red candle in the weekly chart and this fall was roughly 4%. The next probable support in the weekly chart comes at mid Bollinger line (presently at approx. 9546) and 38.2% retracement (presently at approx. 9280.62). If mid Bollinger line is breached on closing basis, Nifty may target for 34 week moving average which is presently at approx. 9180.
The weekly CCI, RSI and % K of slow stochastic has just entered into respective normal zone which is (taking cognizance of weekly candle) bearish to neutral.
Fig: Nifty Weekly Chart
As shown in the following chart, when we project the fall from approx. 8969 to approx. 7894, from recent high of approx. 10138, 100% projection comes at approx. 9063. So this is a crucial level to look forward in weeks to come.
Fig: Nifty Weekly Chart
Fig: Nifty Technical Chart