Good morning.

The intra-day Buy trade worked yesterday. Same approach for today

NIFTY: HIGHER HIGH, HIGHER LOW
Day Low High
Aug 14 19257 19465
Aug 16 19317 19482

BANK NIFTY: LOWER HIGH, LOWER LOW
Day Low High
Aug 14 43776 44212
Aug 16 43600 44002

NIFTY: SIGNS OF BOTTOM?
Fresh shorting now only if Nifty breaches 19,257
Texture of market is only for intra-day trading now
No positions should be carried forward overnight
Texture is “Buy in morning” and “Cover in closing”
Nifty refusing to fall below 50 DMA
Bank Nifty refusing to fall below 100 DMA
SBI led Bank Nifty recovery yesterday
Nifty IT very strong, wont let Nifty fall a lot

MARKET: RECOVERING FROM INFLATION SHOCK
Market’s reaction to inflation data was very mature
Market’s belief is that July inflation was an aberration
July and August had record rainfall, veggie prices easing
Brent crude has significantly cooled from $87 to $83
Money market will open after yesterday’s holiday

NIFTY OUTLOOK
First support zone: 19,370-19,400 (Options based)
Bigger support zone: 19,317-19257(Last 2 days low)
No short trade in 19,257-19,370 range
Buy for intra-day at 19,370-19,400
Add for intra-day: 19,330-19,370
Very strict stop for day traders: 19,300
A sharp 3 pm move is possible, will revisit in Closing
Cover all positions at 3:20, take fresh positions tomorrow

BANK NIFTY OUTLOOK
BANK NIFTY: LOWER HIGH, LOWER LOW
Day Low High
Aug 14 43776 44212
Aug 16 43600 44002


Bank Nifty is in no trade zone
Aggressive traders can buy in 43,650-43,800 band, stop: 43,500
Sell zone: 43,900-44,050, stop: 44,250

GM

MARKET: PRICE AND TIME CORRECTION
Nifty has now gone through exact 1 month correction
All-time high of 19,991 was hit on July 20th
Nifty has fallen 3.4%, Bank Nifty 5.4% from highs
Bank Nifty has shown signs of a bigger correction
Bank Nifty is now 1000 points away from 200 DMA
Nifty periodically getting support from RIL, IT, L&T or FMCG
Midcap Index has fallen only 0.9%, Small Cap 1.5%
Very rare to see midcaps and Small caps not fall in falling market

MARKET AND STOCKS: AT CRUCIAL LEVELS
Nifty: In the zone of 50 DMA and 50 DEMA
Bank Nifty: In the zone of 100 DMA and 100 DEMA
Nifty IT: Trading above all moving averages
Nifty IT: Has made a golden cross, strongest index now
ICICI Bank: 6% off highs, at 50 DMA
TCS: 6% off highs, just above 200 DMA
SBI: 9% off highs, testing 200 DMA daily
HDFC Bank: 10% off highs, just above 200 DMA
ITC: 12% off highs, at 100 DMA
Reliance: Close to life time high, adjusted for JFS

NIFTY OUTLOOK
Nifty made a new series low on Friday
Nifty broke the low of August 14 on Friday
First support: 19,253 (Friday low)
Bigger support: 19,210 (options based)
Market’s trading texture now is “Sell on rally”
Trading texture will change only above 19,500
First resistance: 19,373 (Friday high)
Bigger resistance: 19,439 (Options based)
Sell at open, add zone for shorts: 19,350-19,400
Stop loss for all short trades: 19,439
Long trade only if Nifty defends 19,253
Stop loss for long trades: 19,210

BANK NIFTY OUTLOOK
Bank Nifty is the weakest component of the market
First support: 43,672 (Friday low)
Bigger support: 43,600 (Series low)
Possible to see 200 DMA of 42,800 during this correction
First resistance: 43,957 (Friday high)
Bigger resistance: 44,212 (Aug 14 high)
Sell zone: 43,900-44,000
Add zone for shorts: 44,000-44,100
Stop loss for all shorts: 44,212
No long trades in Bank Nifty till it closes above 44,212

GM

NIFTY OUTLOOK
First support: 19,296-19,318 (Yesterday low and 50 DMA)
Bigger support: 19,253 (Series low)
First resistance: 19,458 (Options based)
Bigger resistance: 19,554 (20 DMA)
Traders need to play the range of 19,250-19,550 smartly
Sell zone: 19,400-19,450
Add sell positions: 19,450-19,500
Stop loss for all short positions: 19,558
Buy zone: 19,350-19,400
Add buy positions: 19,300-19,350
Stop loss for all longs: 19,250

BANK NIFTY OUTLOOK
Fin Nifty expiry today, last 3 expiries have been weak
Long above 44,205, “Sell on rally” below this level
First resistance: 44,113 (Yesterday’s high)
Big resistance: 44,205 (Options based)
First support: 43,862 (yesterday’s low)
Bigger support: 43,740 (100 DMA)
Sell zone: 43,950-44,150, stop loss: 44,205
If 44,205 sustains, can chase longs via Calls
Other option for longs is to wait for dip till 43,740
Buy on stability at 43,740, stop: 43,600

Jii exit impact on Nifty.

Level based trading vs breakout trading.

Good morning

NIFTY VS MIDCAPS
Index This month This year
Nifty -1.8% +7%
Midcap +2.2% +22%
Small Cap +1.3% +22%
Nifty Bank -3.6% +2%
HDFC Bank -4% -3%
IDFC First +5.5% +56%

LEVEL BASED MARKET VS TRENDING MKT
Last month was trending market
In trending market, you should stay with the trend
In uptrending market, you can buy on dip or rally
In downtrending market, you can sell on dip or rally
This month’s market is contracting and level based
In level based market, you need to trade the boundaries
In current market, you need to sell the rallies and buy the dips
Current range for Nifty is 19,250-19,550
Selling near 19,550 and buying near 19,250 is working
In trending market, stay with trend and make big profit
In contracting market, take small profits daily

NIFTY OUTLOOK
Trade only if you can take both sides
Keep taking 40-50 point profit in both directions
First support level: 19,334 (50 DMA)
Bigger support level: 19,253 (series low)
First resistance level: 19,443 (yesterday high)
Bigger resistance level: 19,550 (20 DMA)
Buy zone: 19,300-19,350, stop loss: 19,250
Sell zone: 19,400-19,450, stop loss: 19,550

BANK NIFTY OUTLOOK
Texture is “Sell on rally” till 44,205 is crossed decisively
First resistance: 44,151 (yesterday’s high)
Bigger resistance: 44,205 (20 DMA)
First support: 43,860 (Options based)
Bigger support: 43,750 (100 DMA)
Sell on failure of any rally, stop loss: 44,205
Buy on stability above 43,750, stop: 43,700

44205 importance became clear today on Bank Nifty