Technical Analysis of Indian Equities by Nooresh

Nifty Index View and Other Indices–Correction or Trend Change ?

Today Nifty might have dropped just a percentage but we saw a sharp 3-5% decline in the Midcap and Smallcap Index.

Is this a Healthy Correction or a Trend Change ?

Lets look at the charts technically on simple parameters.

Nifty Technical View

  • Trendline supports come at 9800/9700.
  • Previous swing highs at 9700. A small bottom at 9790.
  • So till we do not close below those zones the momentum remains strong in the Higher Top Higher Bottom Formation.
  • Last major bottom at 9450 is a trend reversal zone.
  • Ideally assuming the trend is in focus one could have a stoploss a few points below 9700 and look for a pullback trade.

Nifty 9700

Bank Nifty Technical View

  • Trendline Support and previous highs at 23500-23800.
  • Last bottom at 23000 would be a trend reversal zone.

Bank Nifty

Nifty Midcap

Back to testing the lows of last few months. Could act as a support zone.

Nifty mid 100

Nifty Smallcap

A good hit today and now back to testing the lows of 6900 made in last few months. Could act as a support zone.

Nifty Smallcap

Conclusion

  • The trend remains up in short term and the current dip could be a trading opportunity with strict stoplosses below the support zones.
  • The short term trend change levels are still a few % points away.

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Article by Nooresh Merani

Nooresh has written 2627 articles.

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{ 2 comments… add one }
  • Sam August 10, 2017, 21:29

    Hi, thanks for the post. What is the probability of a sudden breakage in all support lines extremely swiftly? Without any indicators presenting themselves in advance. Specifically if there are geopolitical worries? Are there other schools of technical thoughts suggesting that trend lines are already broken?

    Reply
    • Nooresh August 10, 2017, 21:34

      There is always a risk of geopolitical tensions and I don’t think it’s possible to place that on technical reasons. As technicals is only about following the trend.
      I dont know any way to predict black swans or geopolitical actions , the only way to safeguard is to not leverage to a level where such risks can kill your capital by a big hit.

      Reply

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