Nifty had a fantastic start of year up 12.6% till date rising on back of equity buying by FII and value buying seen by HNI and retailers.
FII has pumped in 8000 cores in Jan Month alone,One of the biggest buying streak seen in recent times. Next week will be an interesting trading week as Nifty is approaching the crucial 200 DMA zone .
Last week we discussed Nifty Trend deciding level as 4995 is bound to move up and same happened this week with Nifty made a high of 5217 just 3 point short of our final target 5220
On Hourly charts shown above i have pointed all the 5 Gaps which have been left unfulfilled from the rise of 4640-5217 on Nifty Spot. For a healthy rising markets such gaps needs to be filled as it can be considered as VOID left in a newly constructed building. Gaps will get filled in next downleg of Nifty most probably in February.
1 Gap :4641-4676
2 another small gaps are remaining with small gap of 8 points which we can ignore for time being.
Keep watch on above levels as Gap provides an excellent trading opportunities.
On Daily charts Nifty took resistance at 200 DMA and formed a Hanging Man Candlestick on daily charts.
The Hanging Man is a bearish reversal pattern that can also mark a top or resistance level. Forming after an advance, a Hanging Man signals that selling pressure is starting to increase. The low of the long lower shadow confirms that sellers pushed prices lower during the session. Even though the bulls regained their footing and drove prices higher by the finish, the appearance of selling pressure raises the yellow flag. Hanging Man requires bearish confirmation before action. Such confirmation can come as a gap down or long black candlestick on heavy volume.
So Monday Close in Nifty needs to be seen closely for confirmation of any reversal pattern.
Volumes with price action data analysis always provided has inclination of what are the intention of smart money going forward.Look at the Blue Circles i have marked in above charts. These days were identified as BIG VOLUME DAYS and on an average after 3-5 session Nifty has started its correction.
We had a big volume day on 25 Jan so next week will be crucial as per past historical trends.
I do not expect market to fall in straight line we will have a phase of consolidation than again a trending market,Markets will never move in a single line.
If we draw trendline resistance on Daily charts it comes at 5260 as shown in above chart.
Indicators can remain Overbought and Oversold for a extended period of times Nifty has been rallying for 5080 the area where indicators went overbought and it made a high of 5217 in this overbought state.
,Save the above chart and try to take less dependance on indicators before taking trading decision. Price has everything in it only you need to follow it closely.
Use Indicators for additional confirmation but never for trade initiation.
Nifty Fibonacci Levels
Nifty Weekly Chart
On Weekly charts we have trendline resistance at 5251. Weekly charts are still not overbought and Nifty weekly trend is Up. Nifty Weekly mometum will fade only on a close below 5123 till than weekly trend is Up.
Higher time frame should always be given preference for positional traders.
Nifty Monthly Chart
Out of 685 points Nifty rally. 450 points had come on last 4 Tuesdays, i.e. 3rd, 10th, 17th and 24th Next Tuesday is on 31 Jan is also Tuesday and Monthly closing so exciting Tuesday is waiting for us. Will History repeat itself?
Monthly Trend will get into momentum on a close above 5285