Short Term Correction Possibility amid Most Bullish News led Global Markets
Technical Analysis,Research & Weekly Outlook
(Oct 26 to Oct 30,2015)
Nifty-EOD Chart (23-Oct-2015):- |
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1- 7539.50 on 08-09-2015(Wave-1 beginning after 'ABC' correction completion)
2- Wave-1(8055.00 on 18-09-2015)
3- Wave-2(7691.20 on 29-09-2015)
4- Wave-3(8244.50 on 12-10-2015)
5- Wave-4(8088.60 on 13-10-2015)
6- Wave-5 continuation with recent top formation at 8328.10 on 23-10-2015
7- Long Term Trend turning up almost confirmations after 5 sessions closing above its decider 200 Day EMA(today at 8186).
Conclusions from EOD chart analysis
Rally beginning after 'ABC' correction completion at 7539.50 on 08-09-2015 and now its continuation with all trends turning up almost confirmations.
Previous 4 sessions intraday charts analysis
Nifty-Intra Day Chart (Oct 19 to Oct 23,2015):-
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1- Selling between 8240-8260 on 19-10-2015
2- Selling between 8271-8283 on 19-10-2015
3- Selling between 8280-8294 on 20-10-2015
4- Supports between 8230-8258 on 20-10-2015
5- Selling between 8272-8294 on 21-10-2015
6- Selling between 8252-8258 on 21-10-2015
7- Support between 8217-8240 on 21-10-2015
8- First 3 sessions trading between 8217-8294 with good selling and minor supports.
9- Mixed patterns formations on 23-10-2015
Conclusions from 4 Sessions intra day chart analysis
First 3 sessions trading between 8217-8294 with higher levels good selling and minor supports at lower levels therefore strong indications of correction below 3 sessions lowest(8217) but gap up opening was seen on 23-10-2015 after ECB Bullish news led blasting all Global markets.
As Mixed patterns formations on 23-10-2015(detailed analysis is given below) therefore valid break out confirmation of first 3 sessions trading range is still required.
Intra Day Chart Analysis(26-10-2015)
Nifty-Intra Day Chart (23-Oct-2015):-
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1- Minor selling between 8306-8315
2- Minor selling between 8306-8312
3- Whole day Down moves in Bullish Falling Channel
4- Whole day actual trading between 8281-8328
Conclusions from intra day chart analysis
As ECB points to more economic stimulus therefore Dow Jones's triple century and strong closing of all the European markets on 22-10-2015 and resultant blasting all the Asian markets so gap up opening of Indian markets on 23-10-2015 but gap filled up through slipping below previous sessions highest(8294.40). Although whole day positive zone trading with 0.53% up closing but view will cautious due to following intraday developments:-
1- Indian markets completely under performed Global markets.
2- Minor selling patterns formations.
3- Whole day Down moves in Bullish Falling Channel
As both buying and selling indications therefore Mixed patterns formations will be understood on 23-10-2015.
Conclusions (After Putting All Studies Together)
As Long Term Trend decider 200 Day EMA(today at 8186) forcefully broken out on 16-10-2015 and last 4 sessions closing above it also therefore strong signals of fresh rally beginning towards and above life time high but for next Short Term Trend view is cautious due to following reasons which are indicating Short Term Correction possibility also:-
1- Short Term indicators turned overbought after previous 30 sessions 788 points rally.
2- 5th Wave of on going Short Term Rally continuation
3- Long Term Trend decider 200 Day EMA(today at 8186) forcefully broken out on 16-10-2015 but after that good intraday selling in next 3 sessions.
As interest-rate cuts in China last Friday therefore strong closing of all European and US markets last Friday and in reactions such strength will be seen in all Asian markets tomorrow therefore strong opening will be seen in Indian markets also. Last Friday strong markets were on the back of ECB economic stimulus news and next Monday surging markets will be Chinese interest rate cuts led but will not be the result of technical positions formations. Except that all the Global markets will have to prepare in next 3 sessions for post FOMC trading on 29-10-2015 which will be Oct Derivative Expiry day also therefore view will be cautious and watchful in following manner:-
1- Sustaining above last 2 sessions highest should be firstly watched next Monday after strong opening due to Chinese interest rate cuts news.
2- As trading on next Tuesday and Wednesday will be news free therefore intraday technical patterns formation will be seen and then final view will be formed accordingly for next trend.
Certainly Short Term Correction possibility amid most Bullish news led Global markets is suggesting to watch sustaining beyond following 3 levels one by one:-
1- Last Friday Highest(8328.10)
2- Last Wednesday Highest(8294.40)
3- 200 Day EMA(today at 8186)