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

Strategy now on Bank Nifty: 44,205 now your stop for longs and possible to see 20 DMA of 44,800.

Nifty still an avoid for now.

GM

BANK NIFTY: BREAKOUT!
Massive rally in Bank Nifty above 44,205
Strategy in Closing was to carry long positions
Need to adjust stop loss after gap up in morning
Bank Nifty stop was 44,205, now would be first hour low
Bank Nifty set to cross 20 and 50 DMA in gap up (44,725)
Nifty set to test 20 DMA of 19,529 after gap up
If gap up sustains, short covering can be huge on Nifty

MARKET: WHERE ARE THE SHORTS?
Index/Stock Off highs
Bank Nifty -4%
Nifty 50 -2.7%
Kotak Bank -14%
Bajaj Finance -11%
HDFC Bank -10%
SBI -8%
Tata Motors -8%

If Nifty sustains above 20 DMA, expect short covering
Weekly expiry today, yesterday was first day of move
A fresh move normally lasts for at least 3 days
Only risk if if yesterday’s move turns out as fake breakout
Yesterday’s low should be the stop loss now for all longs

NIFTY OUTLOOK
First resistance: 19,528 (20 DMA)
Biggest resistance: 19,645 (last swing high)
First support: 19,444 (Yesterday’s close)
Bigger support: 19,366 (yesterday’s low)
If buying in gap up, need to keep strict SL of 19,444
If Nifty sustains above 19,528, chase via Calls
No short trade now unless market confirms breakout was fake

BANK NIFTY OUTLOOK
44500 Call
First resistance: 44,604
Bigger resistance: 44,725 (20 and 50 DMA)
If 44,725 sustains, can see bigger short covering
Need to keep an eye on ICICI Bk, Kotak and HDFC Bank
If HDFC Bank starts to fire, Bank Nifty can see big rally
First support: 44,479 (Yesterday’s close)
Bigger support: 44,205 (Breakout zone)
Stop loss for all longs now at 44,205
No short trade unless breakout fails

We will start close to 44800