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!
Category: Gann INSIDES INDICES UPDATE
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!
MORE THEN DIRECTION your TIME FRAME MATTERS from here
its ANNIVERSARY DATE for NIFTY from 2023 LOW!
NIFTY yesterday broke the all important support of 21,800 on intraday basis but failed to close below that! On technical basis a close is required for added conformation! as I have been very clear that this support will break and MARKETS are going towards JANUARY lows on LARGE CAP INDICES that view is very much intact! obviously that would take some TIME so if you cannot wait in cash part of your profits and reenter again on higher levels!
more then direction your TIME/FRAME is going to matter as a TRADER!
If you are someone who have capitalized on this recent 700 points decline from high of 22526 then a bounce of 200 to 300 pts shouldn’t bother you but if you have been short since 22100 then look to secure your profits! it’s certain that INDICES in next few weeks are headed much lower but keeping that fact in mind we would have to deal with short term volatility and have to strategize accordingly!
I have been selling calls and that trade have worked considerably well! Very soon I would share that trade which I gave to subscribers on 1st of MARCH when MARKETS went up crazily!
FOMC MEAT finally can push U-S-INDICES out of their consolidation!
S&P is consolidating in 80 point band since last 10 days this cannot last forever! todays EVENT should finally trigger a large move! 5050 on downside is absolutely critical as long as that’s holding TOP cannot be confirmed! dispite a potential PRICE and TIME square TOP cannot be confirmed until 5050 breaks on downside!
expecting that to break soon! with or without a new high! critical seasonal date today as well! EQUINOX always matters for WALL STREET!
what’s next for NIFTY after yesterdays sharp selloff
it looks like NIFTY have ended its rally under 22,600 which I had been expecting since late FEBRUARY!
A close below 22,220 have provided us the conformation for a TOP which we have been looking for some days now! although dispite having that confirmations we still dont have a structure for a waterfall decline simillar to what SMALLCAP INDEX had few days back! we still require more severe technical breakdown especially on NIFTY!
that breakdown is placed below 21,800 on SPOT! once that breaks on a closing basis we then could see a brutal liquidation on NIFTY which would drag the INDEX atleast below JANUARY LOW of 21,137!
here we have to note an important point! the TOP which we are discussing is a major 4th SECTION TOP of the entire advance which started from LOWS of JUNE,2022 and MARCH,2023! so it’s not going to be a small pullback and fresh highs! this TIME it would be different! I wrote an article on 16th,FEBRUARY explaining this point in detail!
TOMORROW is a very significant date for NIFTY as I discussed in my Saturdays post so be watchful on whatever trades you are going to carry for TOMORROW! the overall range is going to be very wide then usual 200 to 300 points band which we have seen since mid FEBRUARY! this time it would be 300 points either sides from 22,100!
Another thing which I would be watching closely is U-Shttps://ganntradersaahil.wordpress.com/2024/02/16/nifty-setup-as-i-see-it/-MARKETS!
on S&P I have given 5185 as a very important PRICE TIME SQUARING LEVEL TIME wise its date is on 18th,MARCH frankly I think it’s only a matter of TIME before U-S-INDICES turns lower we only have to look for whether they gets a higher high above 8th,MARCH high or straight away they turns lower! let’s see!
gann,insides 