The Nifty is now pressing up against resistance as represented by the upper boundary of a rising wedge and the Aug 2019 low. The Nifty is on my radar for a short trade with over-weighted leverage. In order for me to establish a short position it will be important for the advance to stall out in the 10,600 zone and push sideways for a week or two. A close above 10,800 will nullify my eagerness to be short the Nifty futures contract in Singapore. Should price stall and drift sideways, a decisive close below the lower boundary of the wedge will be my signal to sell short.
Hi Peter, First of all, what an honour to be able to share our view with a trading legend like you.
Here is our view on NIFTY 50 (Short Perspective)
-We consider that the bullish impulse we are observing on the market (B) is a correction of the previous bearish motive wave (A) and that "C" is remaining
-From a Technical Perspective B is an ascending Wedge Pattern
-The Strongest zone we are observing for a reversal is the convergence between the compression of the Wedge Pattern + Descending Trendline + the reversal zone of 2018
-If the Bearish Hypothesis is right "C" should reach at least the 7600 zone
-Our Bearish Perspective will be invalidated if the price reaches the green line above the descending trendline.
trendzilla
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I have a doubt, i understand NIFTY is now using weighted average for scrip boarding, means any instrument at any time may come in and go out. Given that scenario, technical will still work?
pankaj564
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@ThinkingAntsOk, excellent analysis, i will like to add one more trendline matching with yr view. if we connect lows of 10004 and 10637 , we get resistance in 11200 zone and that looks the ultimate resistance zone or target for WAVE B
ThinkingAntsOk
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@pankaj564, Thanks for that, Definitely that line converge on the same spot, making it even a more relevant zone!
Satonomics
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Hi Peter, I understand the SL area in this case. But what would your TP levels here? I (in some video) learnt you use Moving averages. So all moving averages suggest we are in uptrend here. Would you call taking this trade 'against the trend'? Or would you let the dominating move from 12.5k to 7.5k be your guiding force? Obviously if you plan to SHORT, then latter is true. I understand this could be possible Wave B. 0.618 is a typical top which is additional confluence here.
I simply would like to know the area of your TP level for my learning..
anmolteja
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@PrateekSood, I'm looking at weekly moving averages on Nifty and it is very close to 50 and 100 weekly EMAs which are strong reversal points historically. Confluence of both these EMAs are present close to the current market price so high chances the rising wedge will break on the downside.
reversecharts
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Watch as the Nifty rips higher and breaks into new all time highs!!! Wave B will be higher than Wave A, abit close to the 1.272 extension of Wave A and in 2021, yes 2021 the full force of Wave C will shake the markets, then the shock of the coronavirus impact will be felt.