Markets back at 5900, Where is it headed Next? Read the Detailed analysis

NIFTY FUTURE – Review of 7^th Mar

NIFTY FUT –   Another fantastic day in a row , in a rare occasion we have see the markets giving such strong moves in a such a short span and that’s pretty welcome amongst the swing trading and intraday trading community.
Yesterday we mentioned that NIFTY FUT has key levels at 5825 and trading above that can hit the swing levels of 5860 levels.
Look at how the markets spanned out once NIFTY FUT managed to sustain above that level( Also our TREND DECIDER of the day) it managed to challenge our BEARS LAST STAND point at 5860 levels. This also was our swing hurdle as well. To quote exactly what we wrote “At the same time on the upside if now NIFTY FUT manages to break above the 5860 levels that will be deemed as a strong reversal sign for the market.”

Look at the strong movement witnessed once that level was cleared , NIFTY FUT blasted to hit the next trading levels of 5900 in no time at all.
We has also mentioned that there is a congestion zone at 5910 levels this is exactly where the rally paused. Hope traders took the trading opportunity to book in massive gains. We had a solid run with our smartsignals too, as that is designed to catch volatility and strong trends. Clocking in more than 800 points in total in last few trades.
But that’s  not what the beauty is, the satisfaction more comes from the fact that we, our readers and traders  stuck to our convictions on both occasions when common sentiment challenged our belief and we collectively reaped in good gains.
During Budget day common sentiment called for a rally but we went short just as per our trading levels. And Recent up move in last few days when common sentiments said markets are in a bearish phase we stuck to basic technical analysis and levels and again came out winners. It’s a pat in the back for all of us.

NIFTY FUT closed at a very crucial  level of 5900 levels. Its time now to sit back and  introspect a longer time analysis again and take an informed decision for the next course of the market. Read our detailed analysis for tomorrow.

NIFTY FUTURE – 8^th  Mar  Trading Guide

Before we start out I  just want to again drill this thing again within our traders that when we talk about technical analysis there is no place for emotions. Its an informed decision based on probabilities, patterns and risk reward ratios. We don’t have to go to common sentiments to find an opinion.
Sample this, When markets were making highs in Jan 2013, did any analyst come out and project that 6120 is a hurdle? We wrote about that level long before it tested , check our blog posts.
When we saw the budget day crash and a few days before it too. We kept on writing that 5630 zones are strong swing support and they did deserve low risk contrarian entries. Did any analyst ask to do that after the budget? We stuck our neck out and did that.
And again the point is not that we are correct all the time, but an informed pattern based decision was taken rather than following common emotions. Secondly the conviction to trade the plan was equally important.

Coming back to NIFTY let us quickly review how the options data have changed over the week. Here is a snapshot of options data early this week  and the snapshot of options data today for comparison

NIFTY OPTIONS SNAPSHOT-5TH MARCH

NIFTY OPTIONS SNAPSHOT-7TH MARCH

If we review the two options charts now there are three evident take away: The 5700 and 5800 PE accumulation have increased significantly justifying the fact that they are emerging as support zones from a series perspective and thirdly the 6000 CE accumulation has decreased too, meaning that the hurdle in that space may be decreasing but still there in  a significant manner. So does 6000 also mean anything else?

Let us go back and see the weekly charts one more time, we reviewed the charts some time early this week.

NIFTY FUT WEEKLY CHARTS-7TH MAR

Swing indicator wise the short term momentum indicator remains positive above 5860 levels. . The mid term momentum indicators are now positive as well and will continue to hold so until NIFTY FUT trades above 5790 zones.

As we see from the weekly charts, this week charts by taking out the 5860 levels have completely engulfed the previous week, Although the volumes are still lower on the pull back candle by a significant margin.

Second cause of concern is that if we review the long term trend line that we see which was breached  4 weeks back. The trend line resistance now also stands at 6000 levels.   Combing these few observations 6000 emerges as a strong swing hurdle now and we need to watch out for that in the coming sessions in a swing basis on the upside.

On an intraday basis now, NIFTY FUT faces immediate  resistance at 5915 levels and clearing that wil go on to target 5940 levels. In case NIFTY FUT manages to trade above 5940 as well we can see a test of the swing resistance zones of 5975-6000 levels. Which will be a definite hurdle to be watched out for. In case we manage to hit that level, it will be advised to lock in gains and wait for the next leg of market directions.

On the downside NIFTY FUT will face good immediate support at 5855-60 levels and until it trades above that level all intra day corrections will be bought into. In case that level is breached NIFTY FUT will slide down quickly to test the 5830 odd zones.

Swing indicator wise the short term momentum indicator remains positive above 5860 levels. . The mid term momentum indicators are now positive as well and will continue to hold so until NIFTY FUT trades above 5790 zones.

Trading levels for the day:

POWERTRADE BEARS LAST STAND POINT OF THE DAY ----- 5910-15 sustaining above which it will target 5940,5975
POWERTRADE TREND DECIDER OF THE DAY ------- 5860-65
POWERTRADE BULLS LAST STAND POINT OF THE DAY------- 5825-30
Breakdown and sustaining below POWERTRADE BULLS LAST STAND POINT OF THE DAY will open target for support of ---- 5800, 5760