Nifty Finds Footing, But U.S. Market Challenges Loom

It was a relatively quiet week for Indian markets, which was not unexpected. As I predicted in my last Sunday’s post, the Nifty stabilized from October 8th. True to our expectations, the market did indeed stabilize from October 8th. This has created a temporary support level for the Nifty at Monday’s low of 24,694. As long as this support holds, we should see a rebound towards 25,400 in the coming days. Once this pullback is complete, I anticipate the downtrend to resume, potentially targeting lower levels around 24,400 and even 23,800 in the near future. “If NIFTY fails to retrace and falls below 24,694, near-term prospects could become more challenging. While my primary focus is on U.S. market developments, I anticipate a significant decline in NIFTY over the next few months.”

On TIME FRONT for INDIAN MARKETS I “Predict a significant shift in market trends between October 21st and 28th. Investors should be prepared for potential volatility during this period.”

US Market on the Brink: Technical Analysis Predicts Sharp Decline

https://ganninsides.com/2024/10/06/countdown-to-market-volatility/

Tick-Tock: Countdown to Market Collapse Begins

“Given our previous discussion, a market reversal in U.S. indices is imminent, with a heightened risk period extending through October 21st. Key dates to watch are October 14th for the Dow Jones Industrial Average and October 16th for the S&P 500, both of which align with significant cycle points. While the recent market activity may appear subdued, underlying developments are poised to trigger substantial shifts in the broader market landscape.”

On the price front, S&P tested the 45-degree angle resistance at 5810 on Friday. As discussed in last Sunday’s post, this level of 5810 was calculated from the intraday low of August 5th. Along with 5810, I have been highlighting the range of 5776-5866 on S&P as a very important resistance zone. Based on this analysis, I had already advised some of my U.S. clients to consider adding shorts on December futures contracts at 5810.

“I’m anticipating a potential sharp trend reversal in the U.S. markets starting next week, possibly around the 14th or 16th of October. It should be an interesting week to watch.”

“DLF: Bearish Outlook”

DLF is in a medium-term downtrend. The stock hasn’t done much since the major high registered on April 1st. For the past six months, the stock has been consolidating in a defined range. However, we now believe that this consolidation is likely to break to the downside.” If the stock remains below 870-890, it should break its swing lows of 815 and 800 in the next few days. From a timing perspective, major price fluctuations are likely to pick up starting on October 21st.”

Bullish Bias in NIFTY, but IT Sector Could Spoil the Party

NIFTY is still consolidating, and this consolidation has been happening with a positive bias. I expect NIFTY to continue this way for a few more days. If something goes wrong, it will likely be from the IT sector. Still holding 24,750 and 24,660 on spot. This pullback should continue towards 25,300-25,400 before turning lower. A turn is due in any case, but a turn after some more pullback would be more ideal.

ICICI Bank: Recent High Signals a Turning Point

“ICICIBANK’s September 20th high may have marked a significant turning point. The stock appears poised for further downward movement. A potential rebound to the 1260 level presents an opportunity to increase short positions. However, if the stock breaks below the 1215 support, it could signal a more pronounced decline. In such a scenario, the next target is 1160 within the coming days. A breach of 1160 could lead to a further drop to 1100 in the weeks ahead.”

“TCS: Price-Time Squaring Signals Major Downside Move”

TCS has an exciting setup. Tomorrow, on October 10, exactly before its quarterly results, the stock is likely to square out its price with time from its November 2023 low. Technically, when such a price and time squaring happens, the stock witnesses a major trend shift. So, post-results, expect a very sharp reaction in the next few days. And looking at the pattern placement on the price front, we are expecting a sharp move to unfold on the downside. Hence, we are looking for a shorting opportunity at CMP and on upsides up to 4350 for potential target objectives of 4150 and 4050 on cash.

Cycle Date Brings Potential Respite for NIFTY

As I predicted in my Sunday post, NIFTY is taking a temporary pause today, October 8th, a significant cycle date. If the market can hold today’s intraday low at the close, it could provide a brief respite from the severe sell-off that began on September 30th. From a technical standpoint, 24,660 serves as a critical support level. A breach below this mark, accompanied by a daily close below today’s low, would significantly diminish the prospects for a meaningful near-term pullback. However, if the market can sustain above 24,660, a decent pullback is likely to occur.

Countdown to Market Volatility”

NIFTY’s Steepest Fall of 2024

“NIFTY experienced its steepest weekly decline in percentage terms for the entire year of 2024 on a close-to-close basis. While the market did fall on June 4th, the weekly close for that week was actually positive. This week proved quite damaging to the overall market structure. Technically, on Friday, NIFTY achieved something it had managed to avoid throughout 2024.”

“NIFTY’s weekly chart revealed a multi-pattern breakdown, closing below 25100 on Friday. This significant decline mirrors a similar event in October 2023 but differs from the pullbacks seen in August and May.”

The NIFTY is expected to encounter strong support near 24,750 in the coming week.on TIME front Market dynamics suggest a heightened risk of a global downturn until October 21st. This trend is rooted in historical patterns.
For short term October 8th marks a critical juncture. Intraday lows on that day could serve as a barometer for potential market volatility. A sustained break below this level may exacerbate selling pressure.
Conversely, a failure to breach the October 8th low could offer temporary respite from market declines.”

“Global markets remain relatively stable, but our analysis indicates that this calm may be short-lived.

Specifically, U.S. indices are approaching a significant time-based resistance point around October 8th, which could potentially trigger a reversal. Since October 1st, U.S. markets have been poised for a downturn, but for various reasons, this reversal has been delayed. However, a change in direction seems imminent. Last week, I highlighted the 5,776-5,866 range on the S&P 500 as a strong resistance zone. More precisely, the 5,810 level represents a 45-degree angle resistance line from the August 5th low of 5,119. Therefore, from a geometric perspective, the index is nearing a critical resistance point. However, time may be a more significant factor than price. Several cycles are converging over the next three weeks, so it’s essential to be prepared for potential market volatility.”

Technical Analysis: Key Dates and Levels for NIFTY and S&P 500

Market Outlook: A Pivotal Week for Global Equities

“Markets continued their strong performance this week. Thanks to Chinese stimulus, Asian markets significantly outpaced other global markets. However, as I predicted on Wednesday, this global market rally is likely nearing its end, possibly around October 1st.”

So “Let’s get straight to the technical points for the NIFTY and S&P.”

NIFTY

For NIFTY, October 1st is strategically important because it’s a price and time squaring date. Coincidentally, October 3rd is another major price and time squaring date for NIFTY from two significant lows. The price at which this squaring would take place is expected to be 26,000 on spot. Therefore, expect this level to break during the next week. Once it breaks, anticipate a sharp decline towards 25,733 and 25,380 in the immediate future. On the upside, the major Gann angle resistance is at 26,350, which is a 180-degree geometrical angle from the August 5th low. This level would act as resistance for the next 10 days.

S&P

“A significant turn in the S&P 500 is highly anticipated next week. Long-term resistance remains between 5,775 and 5,866. If the index continues to trade below this resistance level, a sharp decline towards 5,400 is possible. We’ll see how things unfold starting October 1st.”

Additionally, next Wednesday would mark the end of an eclipse season that actually began with a lunar eclipse on September 18th.
Generally, markets have a tendency to reach the exact point where they were after the start of an eclipse season.
So, in the current case, markets should return to their levels before September 18th. This means NIFTY should get back to 25,286 and S&P should return to 5,610 in the next few days.