The Nifty Smallcap darling of every investor and trader year back, now maximum people are avoiding it. Smallcap is nearly down 40% from the all-time high. The Weekly chart for smallcap is given below. Bearish flag breakout (this is not bookish flag breakout). Here the pole length is nearly 2070 points and flag breakout target is pole length. So if we calculate target from breakout it will be near Demand zone marked with a green rectangle. Which is also Fibonacci level if you plotted from any low.

Smallcap Weekly

Nifty smallcap monthly chart is given below. Symmetrical triangle breakout completed on Jun 2016 which is retested on Dec 2016. After breakout retest, Nifty smallcap rallied from 5500 to 9656 which is 4230 points. Now after huge rally it is making low every month. I am expecting it will gain retest the breakout which is also a demand zone 5800 – 5380. If this level is broken it may take support at lower demand zone 4580 – 4140. The demand zone is bigger because it is drawn on monthly charts

Smallcap MonthlyNifty smallcap Renko chart is given below. If you know basic of Dow Theory you will notice that it was making higher lows and lower lows, which indicates a trend reversal. Why I use Renko? The answer is simple it is very easy to identify the direction of trend using Renko. One can also use it as a trading strategy but he needs to develop it and one thing if you get any trade using Renko it will be a very good trade.

Smallcap Renko

 

The settings of Renko are given below. Again I don’t use supply and demand zones plotted on Renko for trading purpose, I simply used it to avoid taking contra position near supply and demand zones i.e. short near demand zone and long near supply zone.

ScriptBox SizeReversal
Nifty Smallcap0.53
2987

 

The Supply and Demand Zones for the Nifty smallcap is given below. I have plotted 3 supply zones and Demand zones on the chart.

ScriptDemand ZoneSupply Zone
5644 – 54378921 – 6654
Nifty Smallcap5423 – 42887715 – 7352
4034 – 38868427 – 8157

 

Moving Averages –

All the moving averages are calculated on the date 08 – 09 – 2018.

Moving Average DailyWeekly
SMA 5072247955
SMA 10073497504
SMA 20079276493
EMA 5070437509
EMA 10073367316
EMA 20075866599

 

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.


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