MARKETS midweek update

NIFTY have extended its recovery beond 22100.
As I discussed in my sundays post a sustained trade above 22100 would keep INDEX safe from a risk of immediate colaps.
because 22100 happens to be a price and time equality level its significance for short term is going to stay considerably high, for next few days.

this level would come higher from next week onwards!

for medium term as i kept discussing throughout last week when markets were collapseing that a failure to break below 21710-21530 is unlikely to damage the medium term uptrend.
also it would keep the ascending flat topping pattern intact on NIFTY.
Until and unless that flat pattern is broken there wont be any clear positional trade on NIFTY.

market would keep doing this back and forth in broad range.
As an analyst I would expect a defining turn in next month because this market has been absolutely flat since last 3 months.
The monthly expiries of February march and now Apr have been absolutely flat.
Things cannot carry on this way forever.

Since last 3 months we have observed a repeated price pattern playing out during expiry week.
In which market pops higher closer to expiry and on first day of new series and post that for rest of the month things goes absolutely sideways.
Lets see whether similar pattern plays out this time or not!

short term update on NIFTY

for short term since 23rd and 24th,APRIL are critical cycle dates we would be looking for intraday lows for both these days.
A sustained trade below intraday lows of both these dates would drag index lower towards its price and time equality support of 22100.
A failure to sustain below lows would push index higher closer to 22600 on upside.

S&P;500;

S&P as expected have posted a good recovery holding its fridays low.
The move above 5006 have pushed index out of extreme weekness.
We discussed the importance of 5006 in my sundays article

So wont go in greater details now.

would like to add just one point here.
Current rebound is just a retracement of the major decline from 5265 once this rebound is done index is expected to drop very sharply in coming days which will add pressure on all other indices including NIFTY.
So watch out for that.
A negative daily close today or tomorrow would give early indications for resumption of another leg lower.

https://ganninsides.com/2024/04/21/the-buy-on-dipp-approach-is-about-to-face-its-real-test-now/

All eyes on 21710 now which happens to be the final level of support for NIFTY

NIFTY gave that bounce which i was expecting but that fell short under the projected level of 22450.
but it still went closer to 22350 and made a hard turn lower.
Todays gapdown is most likely a turning point in its longer term technical picture.
This market now is on a doorstep of entering a technical bear market.

still waiting for final confirmation to come through.
Once levels of 21710 to 21530 vreaks then that would officially end the bullish momentum which has been going on since October of 2023.
As long as this zone is held we wont look to commit large position on short side.
We have been of the view that sooner or later markets would take down their supports.
lets see

For short term level of 21710 is an ultimate support holding that we could see some recovery.
On upside 22100 is a pattern resistance along with a price and time equality level from its recent high of 22775.
So 22100 is a meaningful resistance from here.
On weekly charts if NIFTY closes below 21900 today then that would indicate a hexagon pattern breakdwn so watch out for that.

TIME wise 23rd and 24th,APRIL would be annual cycle dates for NIFTY so expect voletility to rise further during next week.

WHAT NEXT for NIFTY after achieving target of 22100

NIFTY as expected tested its near term pattern support of 22100 once it got a daily close below 22303. As discussed earlier current decline would be categorized as a pullback on larger degree time frame.
Atleast as long as levels of 21710 to 21530 stays intact on downside the possibility of a sizable correction does not persist.

We have been discussing on a major topping pattern which have been developing since early Feb on NIFTY and almost all major INDICES in past many of my followers had Genuine questions why its a kind of a TOPPING formation when INDEX keeps making new highs every 15 to 20,days..
that question is legitimate and understandable but answer of that question is quiet complicated. I have explained it to several of my clients and subscribers individually but explaining those facts in a blog post is not an easy task.
Specially if you are not aware on basic terms of gann theory then it would get more tough for you as a reeder.

So lets wait to see how things unfolds in coming days.
In case my analysis is correct then you have no idea what future have in store for MARKETS.

“SHORT TERM UPDATE:

“NIFTY”

NIFTY post achieving 22100 have shown a recovery which could extend closer to 22450 on spot.
Post this expected recovery we could see a hard turn lower which could drag price below its critical support of 21710.
Utilize this bounce to short INDEX for much lower targets in next month.

“S&P;500”

S&P after October 2023 have broken a rising vibration pattern this have massive bearish implications for medium term.
A break of 5060 have opened up downside target objectives of 4950 and 4840 on cash.
but in extreme short term because INDEX is approaching a gap zone which occured post NVIDIA results so that could trigger a relief rally which can take index closer to 5100 and change.

Primary trend have turned lower for both indices. A expected bounce would make risk rewards more lucrative for fresh shorts.lets see.

https://ganninsides.com/2024/04/15/markets-are-approaching-near-term-supports-but-a-convincing-break-is-required/

MARKETS are approaching near term supports but a convincing break is required

3 weeks window post LUNAR ECLIPS ends for MARKETS from today.
so things and trend should get very interesting from here.

As i discussed in my 10th,APRIL post NIFTY did tested its meaningful resistance which was at 22800 on upside and post testing that resistance we had seen INDEX turn lower and test its support at 22303 today.

Going forward the intraday vreak of support wont be enough we would require a daily close below 22303 to trigger a minor degree reversal.

it still would be a minor degree reversal because a break of 22303 on closing basis still wont break the ascending flat top formation which is under developement since past several weeks.
To break that NIFTY would have to go below MARCH low of 22710.

Once 22303 breaks on closing basis we could see NIFTY testing its near term pattern supports at 22100 and 21860 on downside.

UPDATE on TIME, and CRITICAL SUPPORT LEVELS to watch on U-S-INDICES

I have discussed dates of 18th to 24th,APRIL as a strong REVERSAL window on TIME front.

most likely INDICES globally are in final stages to register that major REVERSAL going forward an immediate excelleration lower is required to further confirm that objectives.

breaking supports is going to be very critical.
For S&P 5060 is still a major support which is still intact.
we have been discussing this support of 5060 since early March.
this time that should break finally not today or tomorrow but over the course of next few days.
for NASDAQ that support stands at 15800 and DJI that support stands at 37500.
do watch out for these supports closely..

DOLLAR too has broken out and as i have discussed several times here that have more legs on upside i have conservative projections of 109 in next few months.

https://ganninsides.com/2024/04/10/new-highs-keeps-coming-for-nifty-in-overlapping-fashion-how-long-this-can-continue/

NEW HIGHS KEEPS COMING FOR NIFTY in OVERLAPPING FASHION, HOW LONG this can CONTINUE?

https://ganninsides.com/2024/04/07/gann-insides-weekly-market-update-for-subscribers/

As posted in my sundays post to subscribers above 22600 NIFTY did expanded higher towards 22800. going forward this 22800 area would act as a meaningful resistance for MARKETS. here we would have to deal with an overlaping market which is of no use for retail traders specifically for them who work with buying OPTIONS!

I have said this multiple times in past that its not an easy market for trend followers because at higher levels this market lacks momentum.
the primary reason for that is a TOPPING formation of a larger pattern which in gann theory is categorized as (ascending FLAT)! more and more patience is required to pass through such pattern formations.

its not going to continue this way forever. TIME wise 18th,to,24th,APRIL is a very strong TIME window which could generate a long pending REVERSAL across national and international markets. Let’s see! I have been looking for this APRIL end window since late FEBRUARY thats the only reason i suggested and personally deployd options strategies to sell 22500 call for MARCH series and at the same time also sell 22500 straddle for APRIL series.
these trades have done well and would make maximum profits as well.
honestly i was expecting a vreakdown in late MARCH but because 21800 was held on closing basis i had to dial back with those expectations and had to carry on with same trades and approach!

MAY and JUNE are going to be absolutely critical months for MARKETS because what dint happened in late MARCH would finally happen during MAY.
but better to wait until markets register a REVERSAL!

for short term trend continues to staay on upside.
And that would persist this way until NIFTY spot holds above 4th,APRIL low of 22303 on closing basis! Higher highs cannot be ruled out as long as that low is held!

NIFTY UPDATE

NIFTY has registered a strong REVERSAL on a key TIME CYCLE DATE and from a very strong resistance of 22600.

I have discussed the resistance of 22600 several times since mid MARCH! going forward todays sharp INTRADAY REVERSAL still may not put INDEX out of overall sideways trend neither it signify the HIGH as an established TOP!
This actually further finetunes the (ascending flat topping pattern) more clean and the most accurate assessment of recent price action.
Since this PATTERN is developing on weekly charts hens thats taking more time and still can take few more days to complete!
TIME wise today and tomorrow are annual cycle dates as i discussed on Tuesday.
So intraday lows of both these days would be very critical!

WOULD WEEKNESS in GLOBAL INDICES end NIFTY’S struggle at ALL TIME HIGHS

As expected after a 400 points UP day on 28th,MARCH NIFTY has gone sideways at highs. I posted on that day as well that these kind of days should be utilize to sell OPTIONS specially CALL OPTIONS.

same setup was there in early MARCH same setup is again available in early APRIL! Lets see again the same PATTERN repeats in APRIL or not? I would think it would!

Technically as i explained earlier that there is no trade for OPTION buyers since late February the ideal trade has to sell monthly OPTIONS with appropriate risk management in place. Now when VIX is approaching 11 that equation of selling OPTIONS is slightly getting more risky!

“CRITICAL LEVELS TO WATCH FOR NIFTY”

levels wise I have given upside tragictry of 22600 with 1% more here and there as maximum stretch which should contain this move at highs. this is not a MARKET which is going to give a runaway move on upside. So better not to get excited with the feeling of fresh highs. As a trader these highs are of no use!

for short term as long as spot stays above 22080-22180 on downside expect current sideways to UP trend to prevail for few more days. TIME wise 4th and 5th,APRIL would be critical CYCLE TURN DATES!

Watch out for DXY and BRENT very closely both are giving breakout which wont go well with RISK assets.

U-S-INDICES are already feeling that pain today lets see whether this time they take down there supports or not. 5120 very critical for S&P,500!

TIME to increase TRADING activities on NIFTY

On 21st,MARCH I discussed that we should limit our trading activity on NIFTY and at the same TIME should also cover the shorts.
we were looking for a pullback towards 22,150 in a normal sinario which we easily got but post that the required thrust to resume next leg lower had been missing 21840 was that key support level breaking which another leg lower was due as of yesterday!

with todays rally that level have shifted higher but broadly the TIME has come to increase trading activities on NIFTY again! this doesn’t necessarily mean to close your eyes and go short straight away but need to get prepared to pull the trigger as and when short term technical signals flashes conformations!

these 300 to 400 pt up days are perfect days to short monthly calls! but that requires a proper risk management mechanisms in place. unfortunately for RETAIL TRADERS the conditions aren’t compelling enough to buy OPTIONS.
Strategically still as traders selling OPTIONS would make money! until and unless VIX moves above 15 this is the only way to go!

Technically NIFTY is within the framework of TOPPIMG formation this PATTERN in gann theory is known as ASCENDING FLAT TOP” where INDEX keeps retesting the high every 3 to 4 weeks.
A daily close below 21800 would had broken it but since that dint happenned the PATTERn keeps rotating and this has kept everyone on their toes specially those who prefer to follow trend.
because they are trying to find something which is not there!

As I have repeatedly mentioned in my past articles 22600 is that level which should hold at highs few points here and there.
Once U-S-INDICES turns lower expect NIFTY to break 21710 soon.
Matter of more days nothing else! Once quarterly edgestments are done things should get back to basics!

https://ganninsides.com/2024/03/21/how-to-approach-this-pullback-on-indices/

OVERVIEW of INDEX TRADES and the probable path going forward

let’s check out what was the TRADE WHICH I Discussed on 1st,MARCH

https://ganninsides.com/2024/03/01/nifty-options-trade/

1 month later

As we expected on 1st of MARCH NIFTY stayed under 22500 so the decision to sell MARCH expiry call of 22500 at 270 was a wise decision! at that TIME it sounded foolish but those who trusted have utilized the complete premium today! 2 weeks back when NIFTY crossed 22,500 few of the members were concerned but after detailed discussion things were again fine!

these trades were taken in heavy volumes hens accumulated profits are good enough for this month! especially after an absolutely sideways month we have to think that as traders we have done a decent job!

initially we were not expecting a major rally in MARCH dispite a significant up day on 1st of MARCH As we all remember post that rally people started to project targets of 23000 and 23500 during the MONTH!

along with this I shared one more trade which was for APRIL expiry

that also have done well the combined premium for 22500 straddle for 25 APRIL expiry have declined from 1012 points on 1st MARCH to 614 as of today.

21500 put too still have a premium of 68 for APRIL this too should do well!

these trades requires good amount of capital to be deployed hens I never share these trades to RETAIL TRADERS.

let’s end with UPDATe on NIFTY

21,840 was a key level which I shared in my sundays post.
As long as that’s holding on spot the consolidation should carry on for next 2 or 3 days more.
this week anyways is a sandwich week where nothing major would be expected we shall take a fresh view from next tuesday not from next monday! first day of new series is usually BULLISH!

U-S-INDICES too awaits a turn lower which I would expect in next 2 days which TIME wise happens to be an ANNUAL CYCLE dates!

see you guys later during this weekend I shall be travelling hens wont be publishing the weekly UPDATe!

HOW TO approach this pullback on INDICES

NIFTY could extend this pullback beyond 22,150 on spot in a normal sinario! as I discussed yesterday as a short-term trader look to secure profits on shorts and prefer reentering on higher levels! So as expected MARKET have rallied from lows and once we go closer to 22,100 we would look to add positions for downside target objectives of 21,625 and 21,400 ideally in next few weeks!

NIFTY have allready fallen almost 800 points from the TOP without any negative developments in global markets! so from here to achieve targets below 21,400 it would require downside participations from global INDIces!

sooner or later we certainly would get that participation but as TRADERS we have to draw a line during which phase we want to get more active and during which phase we want to get less active! we now are in a phase where less activity is required!

FED MEETING triggered the rally on U-S-INDICES

something was about to happen post EVENT and we saw MARKETS move higher! fall in IMPLIED VOLATILITY in OPTIONS MARKET along with VIX expiration was a primary reason behind yesterdays upside! very much tactical in nature which is not unusual! Infact this IMPLIED VOLATILITY factor have always produced upside on all critical EVENT days “whether its (CPI) (NFP) or (FOMC).

that’s why we usually witness rally on those EVENT days! it have less to do with that EVENT itself! that sounds strange but since the inception of 0 D.T. OPTIONS this volatility crush post EVENTS have occurred regularly!

technically with a higher high above 5189 S&P could follow the exact PATTERN which NIFTY played out from 23rd,FEBRUARY to 11th,MARCH! eventually things would resolve on downside but as long as PATTERN supports are holding as TRADERS we can’t do much! but as ANALYST since PRICE and TIME have squared we can convince ourself that a REVERSAL is round the corner! whether that takes 2,days 4,days or 6,days that we would see going forward!