Technical Analysis of Indian Equities by Nooresh

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Nifty – Back to the 8900-9100 resistance. What next ?

Before I go into the post let me just tell you this is just one of the approach to looking at the Nifty chart as of now.

Nifty after making a top at 9100 in March 2015 and a lot of volatility in the 2 years is now back to the same highs.

The next question which comes to mind is will it cross the highs of 2015 at 9100 and start a new momentum move or not ?

So let us look at the Nifty chart

Nifty Technical Chart – Weekly

Nifty Major Move

Observations

  • It looks like a cup and handle formation on the Nifty in the last 2 years with a breakout point at 9000-9100 levels.
  • We saw a similar cup and handle formation of 3 years and 6 years in 2013 end to 2014.
  • The breakout back then was not smooth with Nifty making a breakout in end of 2013 but the real trending move started only in March 2014.
  • Also the Nifty had just recovered from a quick downmove in August 2013 with a solid crack in smallcaps/midcaps.
  • By March 2014 the trend was very clear in the Nifty as well as other broader indices. Do read this report which we came out with in March 2014 – Indian Elections – Do they Change Market Trends 
  • Right now in the current move up to 8900 we have a strong Midcaps/Smallcaps moves already. Also none of the stocks/sectors are showing clear leadership unlike 2014. ( Another post on large cap stocks on radar next)
  • My personal view is the current move does not have legs to do a move similar to 2014 yet. We may review the stance again in coming weeks/months. The markets can consolidate for quite some time before a trending move and in this period would be the time to spot out leaders in the largecaps and midcaps.
  • Believe the next few months would be confusing but the next year or two looks pretty exciting and one should be watching the developments closely.

In the next post will try to focus on Large Cap stocks of Nifty which may give us an early indication of leadership.

Article by Nooresh Merani

Nooresh has written 2745 articles.

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{ 2 comments… add one }
  • UMESH February 20, 2017, 20:10

    Very interesting analysis [as usual]. From today’s moves it appears that Jor Laga Ke Haisha is much needed for it to cross the 9K mark decidedly rather than just a fake out. I think whether one likes or not, indices seem to be moving up in a slow manner expecting some good news…and the Exit Poll outcome would most likely act as the trigger…either way…if majority starts thinking Oh,indices have gone too far already so higher probability of a correction, the indices may catch the majority on the wrong foot and same holds good if the majority view is buliish…Though I personally will trail longs as long as the MAs indicate so…

    Reply
  • Abhishek Chikara February 23, 2017, 18:02

    Thanks for the post. I am a big fan of your work but being in Dubai have not been able to attend one of your seminars. Although I do look forward to attending one when I am in India. But thanks for the post again and look forward to more of these on the broader market πŸ™‚

    Reply

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