Rally continuation but remain cautious because Correction is on cards
Technical Analysis,Research & Weekly Outlook
(Jan 15 to Jan 19,2024)
Nifty-EOD Chart Analysis
(Waves structure)
Nifty-EOD Chart (15-Jan-2024):-
Technical Patterns and Formations in EOD charts
1- Corrective Wave-C of previous Waves structure "ABC correction" completion at 15183.4 on 17-06-2022 and Impulsive Wave-1 of new Waves structure beginning.
2- Impulsive Wave-1 completion at 18096.2 on 15-09-2022.
3- Corrective Wave-2 completion at 16747.7 on 30-09-2022.
4- Impulsive Wave-(i) of Wave-3 completion at 18887.6 on 01-12-2022.
5- Corrective Wave-(ii) of Wave-3 completion at 16828.3 on 20-03-2023.
6- Impulsive Wave-(iii) of Wave-3 completion at 20222.45 on 15-09-2023 and Wave-A of "ABC" correction beginning.
7- Wave-A of Wave-(iv) of Wave-3 completion at 19333.6 on 04-10-2023.
8- Wave-B of Wave-(iv) of Wave-3 completion at 19849.8 on 17-10-2023.
9- Corrective Wave-C of Wave-(iv) of Wave-3 completion at 18837.80 on 26-10-2023 and impulsive Wave-(v) of Wave-3 beginning.
10- Impulsive Wave-(v) of Wave-3 continuation with its recent high and new life time top formations at 21928.25 on 12-01-2024.
Conclusions from EOD chart analysis
(Waves structure)
Corrective Wave-C of "ABC correction" of previous Waves structure completed at 15183.4 on 17-06-2022 and from this level Impulsive Wave-1 of new Waves structure started. Now its Impulsive Wave-(v) of Wave-3 is in continuation with its recent high and new life time top formations at 21928.25 on 12-01-2024 and no confirmation of its completion yet on EOD and intraday charts
Nifty-EOD Chart Analysis
(Bearish Rising Wedge Pattern formations)
Nifty-EOD Chart (15-Jan-2024):-
Technical Patterns and Formations in EOD charts
1- Bearish Rising Wedge Pattern formations
Conclusions from EOD chart analysis
(Bearish Rising Wedge Pattern formations)
Although impulsive Wave-(v) of Wave-3 continuation forcefully but Bearish Rising Wedge Pattern formation is being seen for the last more than 1 month which is an indication of Short to Intermediate Term correction beginning therefore at present cautious approach is also required.
Nifty-EOD Chart Analysis
(Stochastic & MACD)
Nifty-EOD Chart (15-Jan-2024):-
Technical Patterns and Formations in EOD charts
1- Stochastic- %K(5) line has intersected %D(3) line upward and its both lines are rising towards Over bought zone.
2- Stochastic:- %K(5)- 69.96 & %D(3)- 47.38.
3- Stochastic is showing negative divergence
4- In MACD- MACD line has intersected Average line downward and its both lines are falling in positive zone.
5- MACD(26,12)- 173.92 & EXP(9)- 302.72 & Divergence- -128.8
6- MACD is showing negative divergence
Conclusions from EOD chart analysis
(Stochastic & MACD)
Position of Short Term indicators are as follows:-
1- As in Stochastic indicator %K(5) line has intersected %D(3) line upward and its both lines are rising towards Over bought zone therefore it will be understood that this indicator is signalling some more up moves possibility in the coming week but Stochastic is showing negative divergence also therefore only limited up moves will be expected.
2- As in MACD indicator MACD line has intersected Average line downward and its both lines are falling in positive zone as well as this MACD is showing negative divergence therefore it will be understood that this indicator is sinalling stronger possibility of short Term downward trend formations.
Nifty-Intra Day Chart Analysis
(12-Jan-2024)
Nifty-Intra Day Chart (12-Jan-2024):-
Technical Patterns formation in today intraday charts
1- Consolidation between 21716-21749
2- Sharp up
3- Consolidation between 21799-21859
4- Consolidation between 21852-21928
5- Whole day actual trading between 21716-21928
Conclusions from intra day chart analysis
As encouraging results and guidance by IT Sector leaders one day before therefore Indian markets celebrated it last Friday and most of the Indices closed in Green as well as NIFTY IT & Nifty 50 closed with 5.14% & 1.14% gains respectively.
Although little down moves after gap up opening but lower levels consolidation developed and after that sharp up moves were seen. As follow up consolidation remained continued in Mid-Session which remained continued till last minutes therefore Nifty closed near the higher levels of the day. Only intraday consolidation patterns formations and selling patterns wee not seen last Friday therefore last Friday started decisive up moves will remain continued towards Psychological levels of 22,000 in the beginning of next week.
Conclusions (After putting
all studies together)
1- Long Term trend is up.
2- Intermediate Term trend is up.
3- Short Term trend has turned up after forceful break out of last 8 sessions trading range(21501-21834).
As stronger signals of growth was seen in Q3 results 2024 and Guideance of IT Sector Companies therefore Bullish rally with new life time top formations was seen last Friday. Although no confirmation of on going rally completion from EOD and intraday charts but "Bearish Rising Wedge" Pattern formation is being seen on Nifty EOD Charts which is indicating Short to Intermediate Term correction beginning possibility. Let complete selling patterns develop on EOD and intraday charts then any type of correction will be seen.
Although Stochastic indicator is showing more up moves signals and intraday charts of last Friday are also suggesting on going rally continuation possibility but MACD is showing downward trend formation signals therefore fresh and decisive down moves with correction beginning possibility can not be ruled out after some more up moves. As Q3 results 2024 will be declared in this month and on Union-Budget will also be tabled on 1st February 2024 therefore firstly Bullish Indian markets will be seen and finally correction of on going Impulsive Wave-(v) of Wave-3 will be seen which has gained 3090.45 points in the last 54 sessions.
As IT Sector Companies encouraging Q3-2024 results and Guidance therefore sideways correction trading range(21501-21834) was broken out last Friday and fresh Bullish moves of Impulsive Wave-(v) of Wave-3 restarted which remain continued also in the coming week. It should also be kept in mind that "Bearish Rising Wedge Pattern" has also been developed therefore it will be understood that Short to Intermediate Term correction is on cards which may start just before or immediate after Union Budget 2024-25 hence remain cautious also.