Nifty is falling down after making all-time high of 11760, it is down by nearly 800 points nearly 7.5% from high. Nifty Broke 11000 and closed at 10930 which is also Monthly close.

The Nifty Monthly chart is given below, from 2007 Nifty made bearish engulfing 7 times (last monthly close was 7th time). Out of 6 times, Nifty continues downtrend after completing the bearish engulfing but 2 times Nifty failed to continue downtrend. This 4 times Nifty was down from 12% to 57%. When first-time Nifty failed to go down after bearish engulfing it went down by 23%. Close of Sept which was latest engulfing, after previous bearish engulfing failed. But I am still not convinced by Mondays (1 Oct) rally, Crude is at 52 weeks high and USD is at the all-time high.

Nifty Monthly View

Here the first CCI divergence has occurred in 2014-2015. The Nifty was down more than 25% after the CCI divergence

I have Plotted CCI overbought and oversold levels at150 & -150 (Dotted white line)

Now, look at the first verticle line (white) the candle is spinning top and also the first candle of bearish engulfing. The CCI is cutting 150 level indicates momentum is shifting from Bulls to Bears. Next candle is engulfing candle and next few months market was down by 25%.

Second vertical line (Red) candle is the first candle of engulfing but CCI still above 150 reversed from that level so it failed to go down further.

Third vertical line (green) candle is the first candle of engulfing but this time CCI crossed below 150 level and the next candle is also complete bearish engulfing which looks strong.

Nifty CCI

The setting for the Renko charts is given below

ScriptBox SizeReversal
Nifty0.5%3
55165

 

Nifty Renko SZ DZ

If you observe the above chart you will see I  have plotted a moving average. I have used 13 exponential moving average, the purpose of using EMA is to get more confirmation about a trend. Because we cannot only depend upon Renko chart for the confirmation. The most important thing I don’t use a moving average crossover in my trading. Renko is trading below the moving average, two times it had tried to cross Reno but was not able to trade above moving average.

Supply and Demand Zones

Sr NoScriptSupply ZonesDemand Zones
1Nifty11170 – 1111210675 – 10606
11491 – 1149510500 – 10445
11714 – 11652

 

Moving Average –

DailyWeekly
SMA 501134410722
SMA 100113459969
SMA 200107759085
EMA 501124210704
EMA 1001108210110
EMA 200107869219

All moving averages are calculated on the closing basis. Please don’t consider it as a trading signal. This is my personal view it may defer from your view. No buy sell call.


1 Comment

Amit · October 3, 2018 at 8:40 pm

Great Analysis

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