Nifty Outlook for 15th July, 2016

As expected after a day’s pause, Nifty did resume its upward move. Another 100 points on the upside, Nifty would face a major resistance zone of 8633 – 8655. Technically, the rally is getting heated up. RSI has entered the over-bought zone, though it doesn’t provide any signs of danger for the day. The over heatedness could act once Nifty moves within the resistance zone as noted. It would be interesting to watch how it reacts to once in this zone. A healthy correction starting from this zone would be an opportunity to buy. Keep an eye on this zone for the next few sessions to come.

Let us sit back and analyse the entire move up right from 6825. 6825 was an important technical support level, which is exactly 50% retracement from the entire leg up which was in place from 2014. It was during the day of budget, due to announcement of 3.5% deficit and giving hope for a rate cut from central bank, the market move smartly from 6825. The hope rally began very swiftly. Then came less than anticipated rate cut, however there was still hope as governor said further rate cut is possible if monsoon is normal. We saw the largest drop post announcement in the entire leg up. Hope still continues as soon as MET department announced, we will have better than the normal monsoon, and Nifty moved towards 8500 mark. If you were to analyse, one thing is for sure, the entire move up was built on ‘hope’. Now it is time to test reality. If we can hold on to 6825 in the next leg down, we are going to see another Bull Run in Nifty, if not ‘hope’ would turn out to be ‘nightmare’.

For intraday traders (Nifty Future) try to do jobbing on both the sides of market movement. You can use the levels given below to trade accordingly.