Nifty: Is a top in place? Broader market already crashing!

In previous week I published a research here mentioning that broader markets might head for a collapse. If you are only looking at Nifty than it might give you a false sense of comfort that there is not much change but since we published that research the broader markets have continued to inch sharply lower.

#KarnatakaElection outcome gave clear signal that a Congress ruled state so far is now getting converted. So this should be taken as a major milestone achievement by BJP government. Markets were already discounting this as Nifty rallied from the lows of 9950 to the high above 10900 levels. We indeed mentioned about this in our morning research report – The Financial Waves short term update.  Despite of the outcome Nifty closed negative which clearly indicates exhaustion and negative close on positive news is a sign of concern.

Even yesterday both Midcap and Smallcap indices were negative and the number of declining stocks had been drastically higher than the advancing stocks.

Look at the below Advance decline chart that shows

Chart courtesy: icharts

On 10th May we published an article which showed our apprehension about the recent up move here is the link of that article in case you missed it – Is broader market headed for another crash! Here is the reason!

Nifty 60 mins chart:

We mentioned the following in our morning research report which is completely unbiased and irrespective of the outcome of event, See yourself –

“We have been talking about deteriorating health of market since past few days and it is time to be extremely cautious irrespective of the outcome today of Karnataka Election. In case of clear victory by BJP still there is possibility of a volatile movement after a rise since markets seem to be already discounting lot of things by moving higher by 800 points from the lows made at 9950.

Close above this level followed by 10880 is must for extending this up move but failure to do that can result into sudden and sharp reversal.

We have been accurate in sighting the low on 18th December 2017 which was Gujarat Election outcome day that too a month before. Let us see if this time the rise is halted and marked with the Karnataka election outcome.

Let us see if markets move in a way irrespective of the event and how fast it digests the news!” BANG ON!

Nifty has moved precisely as expected. We cannot be more accurate than this. Nifty failed to close above 10880 and reversed back sharply. The rise that started with Gujarat Election outcome has been halted with Karnataka election results.

We were extremely bullish near the lows of 9950 and are warning now as various indicators are getting synchronized again. So is it time to pull the trigger on short side?

Keep an eye on the daily research report in which we mention the crucial levels and break of those will confirm a top is in place!

“The Financial Waves short term update” is a daily research report that has detailed analysis on Nifty, Bank Nifty, stocks and strategy with key levels. In case you are not able to track the markets yourself you can also leverage our Daily Intraday / Positional advisory services and get research reports free along with it. To add more to it we have a special Summer offer running and trust me it cannot get better than this when markets are at such crucial juncture! This can be the best investment that you can make and enjoy the next big trend which can be on the verge of starting!

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