Nifty Futures Technical Analysis outlook, View, Prediction, Target, Resistance and Support levels
Nifty today continued to slide lower along expected lines and in line with our prediction and view. As per our analysis, view, prediction we see that the main trend which has been lower since the end of Jan 2018 has now resumed so that simply means that Indian stock markets are heading towards the lower side targets (Details of timeline and targets has been given to our clients). We know that bulk of the market participants are still buying into the Indian stock market thinking that Indian equities will do well in the next week simply because BJP might form the Govt in Karnataka and once again we are saying that regardless of whoever forms Govt in Karnataka Nifty Futures will move to lower side targets. Please get this clear that if BJP wins the floor test there could be a bounce which is not likely as per my analysis based on the astrological signatures and other astro cycle probabilities but we are not invalidating that outcome so assume that BJP does win the floor test in Karnataka which is possible we are not saying that bounce will not come surely it could come but the bigger and more important question is that will the markets change the trend because of this event we are of the view that trend will not change and only at best we could see a bounce back because of the election floor test outcome but coming back to more importantly the outlook and prediction, target, view, and strategy for the next week.
Our view and prediction is that since the trend has turned lower traders should use any bounce back towards resistances to sell or exit trapped longs as we expect lower targets. We use the word trapped because trend has changed to down and based on the open interest data we can clearly see that there are way too many people who are trapped and stuck in their long positions also, we see that many of those people who are stuck have carried their positions and averaged their net longs which means that now we have a situation where headwinds will be drastically increasing next week onwards and most of the market participants who were long have averaged their longs keeping stop loss around the minor support area of 10600-10580. So when 10600-10580 spot Nifty level does break we will have a massive sell off or at least stop losses getting triggered so please keep that in mind which could result into Nifty nose diving around 200-300 points in a very short and compressed amount of time. We will update tomorrow also post the floor test may be late night on saturday or early monday morning based on what the outcome of the floor test is and if it warrants any response or update from ourside then we will guide and update here.
Crude Oil Futures Update. Many of you have been asking me has crude oil formed a longer-term top or at least a near-term top? The answer to that as per my analysis and view is that no crude oil has not yet formed a top and we are of the view that crude oil will see much more higher targets from current levels especially on the Indian crude oil basket front so that means that can crude oil now move towards our first major target of around 82$/barrel in Nymex? Sure we could see that sooner than most people are expecting and we know that many will invalidate this also but the important point to communicate is that we are not saying crude oil will touch 82 now we have been of the view that crude oil target is around the 82$/barrel since crude was at 28-32$/barrel so overall we do not think that the upside is done for now. From a near-term perspective crude oil is heading towards 5100-5200 levels in MCX and that will create massive pressure on the current account deficit and also have a drastic effect on inflation which means that cost of capital will zoom higher for corporate and minor earning recovery that would have been seen on account of lower base effect that too would be lost because of higher input cost and slowing demand. Next week is also important from a time cycle perspective for USDINR today during trade we once again have breached the 68 area and if It stays above 68 then we could see very fast depreciation towards the 70-72 area yes and till now the negative effect of currency depreciation, higher crude oil prices and many other headwinds that have been constantly growing have not yet been acknowledged by the Indian markets and Nifty Futures and next week we could very well have a week of reckoning so there could be large portfolios and what we feel that many FII’s who are investing in Indian equities could further reduce their exposure or become even further more underweight on Indian and that too could spell trouble for the bulls. Overall we do not see that any major upside will sustain sure bounce backs will keep coming from time to time but we still feel we will see much lower targets and prices and we will get much better valuations to invest into the Indian stock markets.
Good Trading To You!