In today’s dynamic stock market scenario here we delve into a thorough analysis of Nifty and Bank Nifty. For those seeking insights into the potential next moves in the market. Joining us for this analysis is the one and only Mr. Amit Jain, a semi-registered professional. If you missed our last session with him, you can find it on our channel. In our previous discussion, Mr. Jain accurately predicted that if Nifty failed to surpass the Rs. 20,000 mark, the expiry would be above that level. True to his forecast, Nifty not only touched Rs. 20,000 but exceeded expectations, reaching Rs. 21,500. Remarkably, we are revisiting the analysis with Mr. Amit Jain after this milestone. Today we promise a wealth of information, so let’s dive in.
Mr. Amit Jain, welcome to our channel. Thank you for being with us. The market witnessed a remarkable fall today, bringing joy to investors looking to acquire assets at lower prices. In navigating the market, psychology and numbers based on technical analysis are crucial, along with effective execution. Proper allocation and maintaining a well-considered risk-reward ratio are paramount. Let’s begin by understanding the psychological aspect, drawing parallels with the US market.
See my screen, I present the Dow Jones chart. Reflecting on the initial days of the pandemic, the market was at around Rs. 28,000, and Dow Jones corrected to Rs. 18,000. Following this, a sharp recovery ensued, marked by a peak at Rs. 36,000, as indicated by the blue arrow. Technicals, especially for positional trading, proved their utility. The correction led to a low of Rs. 28,740 from the high of Rs. 36,333, as depicted in the circle below. Notably, the top that existed before the COVID-induced fall has now become the bottom. Currently, the market stands at Rs. 37,860, showcasing stability in the pandemic fall. As of today, the market hovers around Rs. 37,850, represented by the green arrow line.
Now, let’s connect this psychological analysis with the US market. In India, the financial year ends on 31st March, while most other countries, including the US, follow a calendar year ending on 31st December. Christmas marks a major festival season, celebrated from 20th December to 31st December in foreign countries. During this period, 1.5 weeks of holidays are observed. Here’s a thought-provoking question for our viewers engaged in short-term and medium-term positions: If the market is at its peak at the year-end, would you book profits or hold on before the holidays? Most would likely choose to book profits. In such a scenario, as 90% of profits are booked, who becomes the buyer? It’s evident – smart money steps in. This phenomenon is termed accumulation. The market, therefore, holds more potential for an upward movement as smart money accumulates at higher levels.
Amit Ji emphasizes a crucial point – foreign retailers are not selling at the peak to buy back at lower prices after the holidays. Instead, they anticipate higher prices upon their return. Earning a 10-15% profit so easily is not the norm in the market. The question arises: How far can the market go up? From the current standpoint, the US market could reach at least Rs. 41,100 and potentially touch Rs. 44,220, representing an 8-15% gain. Amit Jain envisions these targets being achieved within the next two to three months, aligning with the upcoming election year in April. The anticipation of an election rally further bolsters the positive outlook for the market.
Let’s shift our focus to the Indian stock market, which has recently experienced a significant downturn. To better understand the current scenario, let’s delve into the Nifty chart, where a noteworthy element stands out – the magical pink line. This line often serves as a clear-cut indicator, delineating bullish and bearish trends. Positioned at 21,400 on the Nifty spot rates, this magical line holds the key to market sentiment.
In the chart, we observe R1 and R2 denoting resistance levels, along with S1 and S2 indicating support levels. Today, the spot Nifty closed at 21,150. To break from this level, the potential downside is around 21,055. While it’s common to anticipate further declines in a falling market, predicting exact levels remains challenging. The potential to reach 21,055 exists, but the likelihood is debatable. The market will ultimately reveal its direction.
Should the level of 21,055 breaks, the market could test 20,920. An interesting technical concept comes into play here – gap-filling. The rally that commenced when the BJP secured victories in a few states resulted in the market opening at 21,000, creating a gap-up of about 300 points. This gap, represented by R1 in the chart, can be considered a form of gap-filling. Technically, if the market descends from its current position, it may fill this gap and reach 20,920.
Now, the pivotal question arises – how far can the market fall in the worst-case scenario? While a decline to 20,565 is conceivable, the probability is relatively low. This is not the ideal time for aggressive buying. The cue for such action lies in the behavior of the magical pink line. When this line falls, signaling a trend reversal, it could pave the way for a substantial upward movement.
The day the magical figure of 21,400 is breached, a clear-cut trend reversal is expected. In such a scenario, the market could target 22,275, with the potential to reach 22,820. The key takeaway here is that the magical line is synonymous with a trend reversal, marking the point at which the market transforms into a clear-cut bullish phase. Investors are advised to refrain from aggressive buying until this reversal occurs.
Now, addressing strategies for the short term, there are two potential approaches. If the market witnesses a decline to 21,055, approximately 100 points below the current level, one could consider building a buying position. The recommended stop-loss in this case would be below 20,920. As per the current analysis, an expiry around 21,200 seems plausible.
However, there’s an alternate scenario to consider. If the market experiences a V-shaped recovery, there’s a possibility of an expiry around the magical figure of 21,400. The likelihood of an expiry on the lower side is deemed lower. Therefore, the suggestion is to focus on buying strategies, avoiding aggressive selling.
Looking ahead to tomorrow’s market, two potential scenarios emerge. If the market witnesses a drop of around 100 points to 21,055, investors might consider building buying positions with a stop-loss below 20,920. This strategy aligns with the anticipation of a possible expiry around 21,200. On the other hand, if a V-shaped recovery occurs, an expiry around the magical figure of 21,400 is plausible.
Today, we delve into the intricate realm of Bank Nifty, unraveling the mystical patterns and numbers that govern its movements. Join me as we explore the magical lines and potential trajectories that could shape the near-term destiny of this financial instrument.
In the realm of Bank Nifty, a particular line stands out – a pink line of resistance. This magical line, accompanied by R1 and R2 (resistance levels) and S1 and S2 (support levels), holds significance in deciphering the market’s movements. Remarkably, the recent market low almost aligns with the first support level, suggesting a resilience around 47,180. While a test slightly below 47,180 is plausible, the closing figure around 47,445 indicates that the market may have probed down to 47,180 but recovered by the closing bell. Notably, in the Indian stock market, the closing average is pivotal, often determining the market sentiment.
In the immediate short term, if the market stabilizes around 47,180, it could present a buying opportunity with a stop-loss below 46,825. The potential upside in this scenario could extend to 47,620. Furthermore, an interesting observation is made regarding the expected expiry level, anticipated around 47,700.
The significance of 47,180 as the first support lies in its ability to dictate market behavior. Monitoring the creation of candles below or above this level, particularly within the 15-30 minute timeframe, offers insights into market maturity. A matured candle pattern above 47,180 might signal a buying opportunity, with the potential to reach 47,620 and 47,800.
Moving beyond these levels, our magical figure is 48,000. Crossing this threshold could usher in a new bullish phase, potentially leading to further gains. Once above 48,000, the market often enters uncharted territory, making it challenging to pinpoint resistance levels. In such scenarios, strategic trading and investment decisions become more nuanced.
With stability above 48,000, the market may target 49,425 and even 49,600. However, a crucial support zone is identified around 47,000 and 46,825. In the event of a worst-case scenario, a decline to 46,400 is conceivable. Analyzing the historical context, a gap-up opening followed BJP’s victories, reaching 47,200 before settling around 47,180. Filling this gap, the market may stabilize. However, a breach below 46,825 would indicate a shift in market dynamics, potentially signaling a temporary peak.
While optimism prevails, it is imperative to acknowledge the corrective nature of the current market. Aggressive buying is advisable only when the magical figure of 48,000 is breached. Until then, adopting a disciplined approach, accumulating profits during falls, and taking smaller trades may be prudent. The magical figures, dynamic in nature, are available on the Intellisys website, offering traders valuable insights into market movements.
For those seeking comprehensive advisory services, Intellisys, a SEBI-registered company, provides tailored guidance for Nifty, Bank Nifty, Nifty and Bank Nifty call options, MCX, MCX call options, NSC Cash, NSC Stocks options, and currencies. Advisory plans start from Rs. 39, catering to diverse trading preferences. The website offers a multitude of benefits, including customized plans, single-call options, and detailed hand-holding till exit points.
In conclusion, navigating the twists and turns of the market requires a blend of technical analysis, strategic insights, and adaptability. As we gaze into the mystical realm of Bank Nifty, may these insights empower you to make informed decisions.