Nifty Today’s Trend, Prediction, View, Target 14th June 18
Nifty Futures today continued its pullback and is now nearing the 10930 spot Nifty level which is being watched by many traders and investors (yes we still consider this current move as a pullback) because this is area of 10900- 10930 which was earlier swing top made on the election day outcome on 15th May 2018 which we had predicted exactly. Now, many traders who are short (some of whom are short on the basis of this post) are keeping near term stop loss of around 10930 but frankly those levels do not hold much significance anymore as per my personal analysis for the simple reason that in our analysis we do not just see levels because those levels that are known to you are also known to others including operators who can just take those levels out for short time in order to force some weak hands out of the system ( as of now who so ever is short has a stop loss around 10930).
Anyways we do not see much significance of 10930 spot Nifty level due to multiple factors and there could even be an intraday breach of those levels but the larger structure as per our analysis does not change. Now many of you may argue with me that 10930 is the previous swing top and I agree with you that yes it is the swing top but there are some other factors which need to be kept in mind before you consider swing tops one of them is from previous swing top to previous swing low time taken vs that of the current move to retest that same swing top.
So in simple words if the fall from 10930-10419 took 5 trading days and now the pullback from 10419 to 10930 has taken more than triple the time 15 trading days as of today then in that case the importance of the swing top reduces. Similarly, if the volume between 10930-10419 fall is considered the volume was much greater than that of the volume between 10419-10930 so that means it is a distribution pattern and not a real move, if assuming this was a bullish move then the volumes should have expanded on the way from 10419 towards 10930 but on the contrary they have contracted.
Besides these factors there are other important factors like for e.g. what pattern is the Nifty making while approaching this swing top? In the present case this is making a rising wedge pattern and hence that too is a bearish sign. From a wave perspective while the swing top is being approached is there significant overlapping? Yes there is clearly significant overlapping and hence that importance of that particular swing top reduces significantly as per our analysis, view and prediction. Next we can take the RSI divergence, if the move towards the swing top is real bullish move then in that case severe or even basic divergences in momentum indicators are not seen but in the present scenario there are multiple divergences on multiple indicators so even on this count the importance of 10930 area reduces. Besides these factors there are other important ways to see if the swing top area remains valid or not so if we take the Nifty PE which was at 26.82 when the Nifty previously was at 10930 now even after 20 trading days during the earnings season the Nifty PE has shown divergence and reached almost 28 for the same price which indicates PE divergence this simply means that there is significant earnings contraction. There way too many other factors also which we will not be discussing here but when all of them are combined it just points to one conclusion that from a technical significance standpoint the area of 10930 has lost its value or the relevance of 10930 spot Nifty level has diminished significantly.
As per our analysis, view, prediction Nifty main trend will remain down even if 10930 is taken out in the near term there will be some other criteria’s to ascertain if the breach is actually valid (if the breach does take place) so we maintain our view that main trend remains down. Be very careful as multiplicity of indicators are showing and indicating that this is actually a bull trap. As usual, if you are only trading on the basis of this post please use your own risk management systems and trade. Please do not over trade and always keep your risk in check before trading.
Good Trading To You!