Rajandran R Creator of OpenAlgo - OpenSource Algo Trading framework for Indian Traders. Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Building Algo Platforms, Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in

Hourly Trend Exhaustion in Nifty Futures Ahead of May Expiry and Election Results

1 min read

As we approach the crucial date of June 4th, 2024, when the election results are expected, the stock market is exhibiting significant signs of nervousness. This unease among traders is palpable, with mixed views surfacing as the date draws nearer. The S&P CNX Nifty Index Futures, as seen in the latest chart, are hovering around a pivotal support zone between the levels of 22420-22520. This support zone is expected to play a critical role in the short-term market behavior.

The Extreme Indications indicator, employed to gauge the market’s tendencies, particularly at -3SD levels, suggests a likely trend exhaustion. This indicator is instrumental in identifying potential trend reversals, and its current readings imply a heightened risk for those holding short-term short positions. The market seems to be approaching a juncture where the likelihood of a trend reversal is increasing.

Volatility is a key player in the current market scenario, with the India VIX trading around the 23.80 – 24 handle. This elevated level of volatility underscores the market’s sensitivity to impending events, notably the election results. High volatility can lead to sharp and unpredictable market movements, creating a challenging environment for traders. Despite this, the fundamental support around 22420-22520 levels offers a beacon of potential stability amidst the turbulence.

There is a strong belief that the markets, in the medium term, have not yet reached their peak. The recent downward movement, characterized by a correction over the past week, is viewed as a temporary phase of selling pressure. This selling pressure is attributed to the market overheating in prior sessions. Thus, while the short-term outlook may seem precarious, the medium-term perspective remains optimistic. The market’s reaction to the upcoming election results will be crucial in determining the next significant move.

The prevailing sentiment is that if the market respects the current support zone and the election results do not trigger excessive negative sentiment, there is a high probability of the market finding a bottom at these levels. This could pave the way for a trend reversal, potentially marking the beginning of a new upward trajectory. However, the uncertainty surrounding the election outcome adds a layer of complexity, making it essential for traders to remain vigilant and prepared for various scenarios.

In conclusion, the S&P CNX Nifty Index Futures are at a critical juncture, with the potential for a trend reversal around the support levels of 22420-22520. The upcoming election results and the prevailing high volatility are key factors to watch. While the short-term outlook is marked by caution, the medium-term perspective suggests that the markets have not yet topped out, and the recent correction may merely be a temporary phase. Traders and investors should closely monitor these developments, as the market navigates through this period of heightened uncertainty and potential opportunity.

Rajandran R Creator of OpenAlgo - OpenSource Algo Trading framework for Indian Traders. Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Building Algo Platforms, Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in

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