NIFTY Hits Target, Potential Reversal Ahead

NIFTY today has achieved our pending target of 24,400 on spot.
With this, the index is reaching a terminal point of the larger rebound which started from the 21st November low.”

A reversal from this point would likely take more time, as such a shift is typically a gradual process. Significant support on the downside is expected in the range of 23,900 to 24,100. As long as the index holds above this level, a further decline may be delayed. Going forward, support levels will become increasingly crucial.”

Holding supports “We might see a short-term rally to the 24,600-24,700 range. However, I believe this presents a prime opportunity to establish short positions using long-dated put options. If my analysis is accurate, the market is poised to resume its downtrend, potentially with greater severity than the October decline.”

On the time front, as I have been mentioning for the past few days, December 9th is a very critical cycle date, so the intraday range of that date will be important.
Even December 6th is going to be a minor cycle date, so both of these dates have the potential to generate a powerful move in the indices.”

S&P 500: Price and Time Convergence, A Crucial Test

“Finally, on the S&P too, December 6th is going to be a major cycle turn date, so let’s see. The momentum cycles on the S&P peaked out on November 11th, so the recent high is not as bullish as it would have been. On the price front, the zone of 6080 to 6120 would be a strong price and time squaring resistance.”

The recent market movement in NIFTY has been intriguing, with a potential pause on the horizon. While the index has met the criteria for a minimum pullback, a target of 24400 still seems achievable.

Key Points:

“Yesterday’s high isn’t necessarily the peak of this rally. The real test lies in whether the current support levels hold. For Nifty, the crucial support zone ranges from 23,750 to 23,950 on the spot index. As long as this zone remains intact, we can expect further upward momentum in the near term. However, a breach below 23,750 could signal a potential reversal.”

From a time perspective, as previously discussed, November 29th is a key date, followed by a very strong and significant time cycle on December 9th.”

“NIFTY has performed exactly as anticipated, as I’ve outlined in my last two blog posts.”

“As I expounded upon on the fourteenth of November”

https://ganninsides.com/2024/11/14/nifty-50-technical-analysis-and-trading-outlook/

“And as I further expounded upon on the twenty-first of November”

https://ganninsides.com/2024/11/21/nifty-23000-a-critical-support-level-as-sp-500-cools-down/

“I previously indicated that November would be different from October. In October, we experienced a straight decline without a meaningful bounce. However, it wasn’t wise to expect an exact repeat in November. This market badly needed a decent bounce, and we finally got it at the right time.”

The 23,000 support level proved to be a formidable fortress, repelling bearish forces. The Nifty index, seizing the opportunity, soared to 23,700 and ultimately conquered our 24,100 target. Given this intense market action, a breather seems likely in the short term.”

Time Cycles and Future Outlook:

If the NIFTY index can maintain its position above 24,100, it could potentially rise to 24,400 and 24,600 in the short term. However, I believe this is only a temporary upward movement against the current downward trend. I don’t anticipate a major trend reversal based on my analysis. Instead, I expect another significant sell-off to occur after this brief respite. It’s important to remember that market trends don’t change overnight. We should let the market unfold naturally.”

The near-term cycle date is approaching on November 29th, and a more significant time cycle date is due on December 9th. These dates will be crucial in determining the market’s future direction.”

Stay tuned for further updates and analysis as we navigate these important time cycles.”

“Picking up where we left off on November 14th, let’s revisit the NIFTY and its current outlook.”

https://ganninsides.com/2024/11/14/nifty-50-technical-analysis-and-trading-outlook/

On NIFTY, I still maintain the view I shared on November 14th. As mentioned earlier, the possibility of a decent bounce holding around 23,000 continues to persist.”

The rally from Monday’s low and the decline from Tuesday’s high have had no impact on our overall view. Our critical support marker remains firm at 23,000 on the spot market. As noted earlier, 23,700 on the upside is a very important level.”

A sustained trade above 23,700 would make the structure more stable, potentially helping the index rally towards 24,100 and even 24,400 in the coming days. Let’s see if our view of a potential bounce is correct. If so, we should also be able to predict a resumption of another severe sell-off after the anticipated bounce.”

For now, let’s closely observe market behavior until next Monday. Only a sustained trade below 23,000 would force me to change my view.”

Let’s dive into the US market!

https://ganninsides.com/2024/11/06/nifty-recovers-us-markets-post-election-outlook/

S&P: From Election Euphoria to Reality

“On S&P, as I mentioned on November 6th, once the election euphoria settles down and the FOMC meeting is out of the way, I expect S&P to turn lower. I also pointed out two very critical time cycle dates, which were November 11th and 14th. As we all know, S&P reached its peak on November 11th, and since then, the index has been trending lower.”

For short term

“The 5840 level is a crucial short-term support. Holding this level could keep the trend flat. However, a breach would likely reinforce our bearish outlook. Cross-asset indicators, including the dollar and 10-year yields, strongly suggest a downward trajectory for the S&P. Let’s watch closely.”

On the time front, the next major cycle date is due on December 6th.”

For medium term On the price front, the S&P still has to fill its election results day gap, which occurred on November 6th, to complete the topping process. That gap fills at 5780 on cash. Let’s see once that fills; a move towards 5660-5680 should be on the cards.”

Nifty reached our projected target zone of 23500-23600, as discussed in yesterday’s post. As mentioned, the possibility of a significant rebound remains strong.  On the downside, 23000 acts as strong support, a 45-degree trendline drawn from the September high. Typically, such strong support holds on the first attempt.”

Therefore, we anticipate a bounce as long as 23000 holds. In the near term, we no longer hold a bearish outlook, at least for the next few days.”

We’ll see. If Nifty starts to sustain below 23000, then next targets are much lower. However, for now, let’s not dwell on that bearish scenario. We are no longer interested in continuing with shorts.”

In fact, once Nifty starts to sustain above 23700, we would be looking for a rally towards 24100 and 24400 on the spot index during the next few days.”

Until early December, the Nifty 50 index is primarily driven by price action, as specific cycle dates aren’t indicated on the TIME front.”

For NIFTY, the 8th and 11th of November were major cycle dates. As discussed earlier, both these dates were significant for the near-term trend. Holding above the intraday lows of both these dates, we can expect a flattish kind of trade for this week. Only a daily close below both these dates’ lows would trigger a fresh leg of sharp decline.”

On the price front, 24,100 was a critical support. A break of that has eliminated the possibility of a bottom formation at 23,816. So, further lower lows are certainly due. At best, we can get a higher high above 24,537, but that too won’t signal a broader trend shift.”

Yesterday, NIFTY tested the 24,510 resistance level but was unable to sustain the momentum. As long as the index remains below this level, it suggests that the recent rebound may have peaked.” On downside The 24,100 level is a crucial support level. If this level is breached, a retest of the 23,800 and 23,600 levels could be on the cards in the coming days.” Given the current market conditions, high volatility is expected. It’s advisable to exercise caution in your trading decisions.”

NIFTY is experiencing the anticipated rebound, which began on Monday. This upward momentum is likely to persist for a few more days, provided the spot price remains above the 23,800-24,000 range. Resistance levels are at 24,510 and 24,800.”

Significant cycle dates for NIFTY are due on November 8th and 11th. Expect a strong price reaction around these dates.

Once this rebound ends we would expect further lower lows on NIFTY and overall market.”

U.S. Markets: A Post-Election Outlook.”

Regardless of current futures trends, we still anticipate lower lows for the S&P 500 once the election euphoria subsides and the FOMC meeting concludes. The next major cycle dates for U.S. markets are November 11th and 14th.”

What may seem insignificant now could make a lot of sense in next few weeks.”

NIFTY achieved our 2nd target of 23900 today. NIFTY’s decisive break below 23,900, as anticipated since mid-October, marks a significant turning point. Traders who’ve been short since late September should consider securing profits. While the current downward momentum is strong, a temporary pause at the 23,600 level is possible. A close above this level could trigger a deeper rebound. However, if 23,600 fails to hold, a decline towards 23,000 seems likely. Key dates for NIFTY’s next major cycle are November 8th and 11th.”