Nifty: A classic reversal, Is a top in place?

Nifty had shown strong negative reversal amidst the euphoria and optimism. Also this time there is no strong logical reasoning for this serious selloff but to put blame on depreciating currency and rising Crude prices.

News will come out after the equity market movement has happened to justify the reasoning for selloff but USDINR has been depreciating for many weeks now and we forecasted it few months back itself.

So do not rely on the news flow which will only provide the satisfaction but not help in taking a trading decision:

Following was published in “The Financial waves short term update”

Nifty daily chart:

Many were expecting a euphoric rise but we had our concerns given cluster of channel resistance. The same was taken out momentarily again resulting a BULL trap like that seen during February 2018. The outcome is also similar to that seen in February so far.

So, there is high possibility that a medium term top might have formed? Many are stuck on the long side at higher levels as Nifty didn’t provide much time and this is classic way in which reversals can happen.

Following was published in our daily research report –

Nifty opened on a flat note near 11598 but failed to sustain near the high and prices eventually moved towards a low near 11496. Heavy weight stocks like Reliance, Bajaj Finance that showed selling on 3^rd September showed some pullback whereas the other stocks participated on downside. This seems like a classical rotational selloff which is opposite to that we were seeing on the upside.

Moving average difference Indicator: At times non bounded indicators provide subtle changes or divergences which the bounded indicators like RSI might not able to amplify. We can clearly see that MACD indicator is now crossing below the signal line. This is another reason why we think that the overall trend is probably changing.

           As shown on hourly chart, (shown in actual research report)…..

In short, Nifty has continued it’s down move and further negative close below 11500 will be sign of concern that a bigger degree correction has started. As long as …… is intact on upside use any rallies as shorting opportunity. Let us see if the rotational selling pressure can continue today as well …………..

Happened: Nifty indeed formed the biggest down bar in today’s session since the beginning of the downtrend. This suggests there is lack of buying and on-going square off of long positions.

It is time to change the strategy from buy on dips to sell on rallies. Avoid catching a low and it is time to stay in direction of the trend. We might be just beginning the bigger degree correction which might take majority by surprise. Are you ready!!!

Get access to “The Financial Wave short term update” and see yourself where is Nifty headed from here. Also see the next Multibagger stock amidst this selling pressure in our “Multibagger research report”. A very big trend is about to start, act now here