Nifty Update

Fibonacci numbers and strategies are widely known and  have long been used in the market with effective results. Fibonacci projections and retracements work on a basic set such as the

23%, 38%, 50%, 61.8%, and 80%.

These are widely used in retracements and can be used in projections as well.
Fibonacci fan and arc charts use these numbers in conjunction with angles and slopes and can be quite a useful tool to "objectively" see through various price levels.

Here are 3 Nifty charts with varying origin points and time periods along with their Fibonacci support and resistance points. Lets have a look at them.


CHART 1 - A Medium Term Fibonacci Fan Chart

This is a Fibonacci Fan with  the recent low of 4500 as the origin point. It gives various projection lines showing medium term support and resistances based on Fibonnaci retracements of 23.6%, 38.2%, 50%, 61.8%, 78.6% and 100%.
As one can see the immediate support line comes near 5050 levels and the resistance line comes near 5550 level. Markets are currently gyrating between this broad range after the recent high near 5630 levels.

Support : 5050      
Resistance :  5550



CHART 2 -  A Short Term Fibonacci Fan Chart

This is a shorter term Fibonacci Fan with the recent top near 5630 as its point of origin.

Support :  5100   
Resistance :  5330



CHART 3 - A Short Term Fibonacci Arc Chart

This is a Fibonacci Arc chart with the developing support trend line as the point of origin.

Support : 5050   
Resistance : 5280, 5370, 5550, 5750



In the short term cluster support comes in at 5050-5100 and cluster resistance comes in at 5330-5370

In the medium term support comes in at 5000 - 5050 and resistance comes in at 5550.

One can keep these points in mind for the short term and the medium term respectively.
A sustained break of these cluster points will be a good indicator of change in trend and momentum.

Global Update

Hi Guys,
              Lets look at a few of the asset classes apart from equities before looking at the Nifty Chart and see how they are faring currently. Looking at different asset classes is a good way of getting an alternate perspective into things.


GOLD CHART

Spot Gold Prices after having formed a double top near $1790 have fallen by almost 10% to its current level of $1620. Gold prices continue to remain below their 200 day EMA and are expected to remain weak going forward after being dubbed a "Dead Asset" by countries world over.

           



SILVER CHART

Silver prices continue to remain weak and have fallen nearly by 15% from 37$/ounce to 31$. Silver prices continued their range bound movement  below the 200day EMA which lies at 33$. The outlook remains weak till silver prices can sustain above those levels.

WTI CRUDE

WTI Crude prices after having seen a good upmove have fallen by 8% in the recent time to sub 102 levels. However the prices continue to remain above the 98$ mark wherein lies the 200 day EMA. One can expect Crude prices to remain firm till those levels are held. Any sustained trading below the 98$ mark may considerably weaken crude prices.

USD/ INR

USD/ INR after having tested its support zone at the 200day  EMA of 48.50 have rallied by almost 8% to 51 level.  USD/INR prices are expected to exhibit more upside going forward. This in a way spells trouble for the Indian Equity markets which may show weakness on the continuing show of strength by the$.

US Treasury (10 Year US Treasury Note Price)

US Treasury prices have largely remained range bound over the recent time and is currently resting at it's support level of 200 day SMA. Holding these levels, one can expect the yields to soften on the US 10 year  Treasury note.

A First look at  things will show you that practically all asset classes have witnessed some kind of selling whereas the $ has gained in strength in the past  few weeks. One should be cautious going forward as this can be taken as Money or Liquidity Distribution and may be a sign of a Global Asset SELL OFF. One should keep a keen eye on these going  forward.




In the meantime our sell call on Nifty stands. Nifty has respected the level of 5750 has not managed to breach it. Timewise, i expect the Nifty to be rangebound between 5000 and 5400 for some more time before making the decisive move downards towards our target of 4200.

As per the above chart our Stop loss stands at 5750. Nifty is currently moving in a channel with channel support and the Fibonacci arc support at 5000 levels. This is a shorter term view for the Nifty. The arrow depicts that the break of 5000 will lead us into the lower orbit  towards  4400 - 4500. As long as 4950 - 5000 holds we can expect the Nifty to not break down and oscillate between the 5000 - 5400 range. The longer term view of Nifty  however remains bearish with targets of 4200.