Study of Probabilities & Not Just Predication - Nifty Weekly 24 APR 2016

Long Term View - Bearish to Neutral

Medium Term View - Bullish

Short Term View -  Bullish

Weekly Chart of Nifty -

Weekly Wide Chart of Nifty  - From 1st week of March 2104 breakout from 6350, Nifty Rallied and topped out 9120 on 1st week of March 2015. Then, Downfall started and made low till now 6825 on 1st week of April 2016.

Price exactly took Support from 200 moving average and retraced towards upwards.

The Fall from 9120 top till now is properly Channelized which is the part of Correction. Current Counter move of this downfall is bigger than the previous counter moves and faster . But  this Counter move rallied with lower average volume create question in mind of its sustainability. Hence, Curious to watch breach of 7980 and 8340 resistance. Breach of 8340 faster will confirm the end of current downfall.

As per Elliott wave theory, Complete downmove is complex correction with WXY (2 standard correction adjoined with X1).  We will continued to mark current countermove as X2 until the breach of 8340 (as that was the level confirms the downmove ends).

Also, RSI is making the higher Swings whereas price couldn't breached its corresponding price swings which indicate weakness and potential to established the Negative reverse divergence. Price is to confirm the NRD.

As per Candlesticks chart, last week closing is formed Doji Candle. Hence it is important to watch follow weekly candle closing to confirm the further trend.  Doji considered as indecisive candle but experience says that if Doji comes after good price movement, then it indicates the maturity of the current trend and it may reversed in next 2-3 candle.

Hence it is important to watch if any reversal sign on coming days. Beware!!! currently there is no sign yet of reversal hence bullish trend will continue. i was just talking about the probability of negative sign on coming days.  Do Keep watch, if 7516 breached downside then only it will confirm the end of current counter move of downfall.

Options Pointers -

We will analyze the next month contracts as  only 4 days are left for current expiry. We revisit the Option pointer progress till the expiry. 

Next Month Contract Shows Option Range as 7500 - 8300 ( 800 Point Range), Currently having Open Interest Range between 15 - 17 Lacs  which is too low.... There are 7000 & 8000 also having similar Open interest . Need to observe the increase in Open Interest in each strike price than only we get clear picture.

PCR ration is 0.88

Max Pain will be at 7700