Expiry Syndrome Prevail: Rollover At Hefty Premium Bull’s Are Likely To Get Trapped: Oscillator continues its downward journey

Nifty Technical Update:

Further update after topping out at 6214 and swing turned down;

Ø  We are in a first leg of down move of 3 wave corrective pattern.

Ø  In this 3 wave Fibonacci correction has to complete up to 5855 or max 5788 lvl.

Ø  First correction of 5922 is now seems to be over and hourly chart (not shown hear) is entering in oversold area.

Ø  This calls for a bounce of 50% of the last decline 6214 to 5922. Which comes around 6068 to 6103 lvl.

Ø  As per daily chart surpassing of 6012 should trigger some buying and 6110 should be the next strongest resistance area.

Ø  ADX continues and remains in BUY mode.

Ø  EMA is breached but closed near the EMA and momentum of EMA is comes to zero hence in next 5 to 8 hours either upward or downward momentum should unfold.

Ø  If you look minutely each bar starting from correction is becoming narrower on every day. i.e. high low difference of each bar is becoming shorter. Also after 2 days decline we observed bull’s day on last trading day. So today I expect some buying before expiry.

Ø  The warning area is premium and most of the future and nifty has hefty premium of 10% to 11% which is quite high and indicates bull’s are forcefully shifty their position and they are very bullish in the market (off course then only they will pay such a high premium as if stock is not going to available). Here our oscillator comes in the picture. It is not suggesting spending such a high premium.

Ø  Being expiry week I don’t think it will surpass 6125 lvl in this time frame and as First bigger move consumed almost 15 days with only 3 down days so this correction should consume 5 to 8 days of which we just completed 2 days. So today we might see bottom formation of temporary nature around 5890/80 lvl and a counter trend rally of “b” wave will undergo.

Ø  At least for today I don’t see breaking of 5880.

Strategy: COVER SHORT AND WAIT FOR RALLY TO MOVE IN 6080 TO 6110 AREA FOR FRESH SHORT.

·          EMA is turned in bullish mode (yet direction is not changed) with 5942/5908 lvl. 10/10

·          ADX continues to remain in bullish mode.

·          STK% is now at 55.84 FROM 66.65 in daily and at 75.94 in weekly time frame.  

Very strong RESISTANCE is at 6103 and trade fresh long only and only above 6103 lvl. support 5880, 5864 and 5814 key supports.

Bank NIFTY closed at 10201 DN BY -0.42% on day basis and -4.86% on week basis.

  

Ø  Update: ADX daily is in BUY mode from 10^th September.

Ø  Also EMA is turned weak and prices are below its EMA and now at 10438/10453.

Ø  THE ST is now at 10818 and 10924 which is likely to be strongest resistance in the next up move.

Ø  The force of damage is getting over as the day passes and we observed 3^rd RED candle on last trading day which is an NRB.

Ø  SO trading or close above 10330 should give extreme short term buy. While major buy will render only above 10550.

Ø  BN is now near its previous bottom support area where we have large number of cluster as support. So bounce is expected now.

Ø  FROM HOURLY CHART IT IS CLEAR THAT LVL OF 10000 IS MORE IMPORTANT AND NOT LIKLEY TO BREACH.

BANK NIFTY: IS IN SELL MODE AND COVER SHORT ABOVE 10330 LVL.