Nifty Weekly Report - 9 May 2016

Monthly View - Bullish

Weekly View - Neutral

Daily View -  Bearish

Weekly Chart of Nifty -

1st Week of May Candle or Bar given the negative confirmation by forming 1st lower low formation and this negative sign was exactly from the 78.6% level which have more significance. Hence, we can evaluate that 8000 will be the crucial resistance for further....    

 (Last week comment - Outside bar for last week of Apr indicate indecisiveness, Outside bar is actually Continuous trend pattern, Hence Next Week Bar is needed to watch to confirm the trend ahead.. Since is indecisive bar, The high probability of last uptrend will continue further until there additional negative signal....As per Fibonacci study, Currently Price tested  and hovering  near 78.6% level (strong resistance) of previous down swings.  If Price is sustained and breach of this 8000 level , then 8350 target will get achieved easily..).

On downside, there was strong resistance at 7500 & 7400... Hence, 7400 - 8000 is the range where market might remain sideways and consolidating for few days or weeks... Hence, Breach of this range will confirm the further trending move.

AS per Neo wave, we will keep "X2" wave as question as it will get confirm only if this complete upmove(6825 - 7992) retraced faster in time which is rare possibility as of now.  

Small NRD trendline has been removed as price breached its previous minor swing high 7979.30 and made top of 7992.

Long NRD is possible but it will get confirm only after breach of 7400 level, hence it is still in question.

(Last week comment - As of now there is no validity or confirmation NRD (Negative Reverse Divergence). 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, The Last week candle formed lower low which confirms bears wins the battle as of now and hence Bulls will get in power only after breach of 8000. The last week candle forms with lower volume as per the previous volume bar which indicates initial days of the next week will be positive. Yes, it means the possibility of minor pullback on Monday or Tuesday.  this is will give the opportunity to buyer to exit their bulls positions as nifty will going to remain sideways to negative for few days or week.

(Last week Comment  - As per Candlesticks chart, The current week candle looks like doji with bigger body compared to earlier week candle. This indicate the tough fight between Bulls and bears at this resistance level.  Coming week candle will clear the who will wins from this battle.... )

Daily Chart of Nifty -

* Price closed below 200SMA, Trendline support broken, Lower low formation confirms that Daily trend becomes bearish.

 * Last daily candle suggest that Hammer at bottom. if High of this candle broken on Monday then minor pullback towards 7850 is possible

* As per Elliot wave, Price is in the wave "a" and if pullback confirm then "b" wave can start which will be tedious to trade.

* Hence , next week will be very difficult for Positional trader. 

* "c" can be tradable for downside after end of "b" wave, hence sell on rise is the market in simple term.

* Probable path shown in the chart.

(Last week Comment -

As per Daily Chart, Price is hovering at 200 SMA and tested 78.6% of Previous downswing.

Price is continuous to be bullish and in higher top formation.

There was minor swing breach downside but price is still above the support trend line.

As per Elliot wave, Price is in "2nd or b" inner wave of C wave... End of these inner wave, Price will again move further upward as "3rd or c" inner wave of C.

Breach of 7515 & 7400, will consider end of this uptrend, till that time- Price will be in Bullish grips only...)

Options Pointers -

Option Contract shows Range as 7700 - 8000 ( 300 Point - Range squeeze), Currently 7700 Put having Open Interest 44.5 Lacs  & 8000 Call having huge open Interest of 65.85 Lacs .... Also, we will keep an eye on 7000 put OI which was increased to 40.38 Lacs from 34.5 lacs...

PCR ration is around 0.73  - indicates oversold market as per Option OI. Pullback is must in next week.

Short buildup in 7700PE and 8000CE will shows sideway possibility in coming week. Hence pullback will temporary or for bull trap purpose.

Max Pain is observed at same 7800 level.

(Last week Comment -May Month Contract shows Option Range as 7700 - 8200 ( 500 Point Range), Currently 7700 Put having Open Interest 42 Lacs  & 8200 Call having open Interest of 40 Lacs .... Also, we will keep an eye on 7000 put OI which is aroung 34.5 lacs... PCR ration is around 0.98  - indicates Sideways price might be possible for in 1st week of may.Max Pain is observed around  7800 level.)

Nifty Breadth Chart -

This is one more indicator which show the Breadth of the Nifty Stocks means Percentage of the stocks in Nifty index are in bullish or bearish trend.  

Indicator Oscillate between 0- 100% same like RSI.  Below 25% is oversold & above 75% is Overbought. 

Nifty Breadth is

30%  -  6 May

22% -   5 May

26% -   4 May

It indicates 8% of Nifty stocks turns to Positive from Negative trend for short term and turning from oversold territory which is positive sign which support our pullback claim for short term...