Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

Nifty Futures – Top Down Analysis – Mar 2017

1 min read

After Uttar Pradesh and Uttarkand Election results, street expectations are getting extremely positive as majority of the traders and investors community hoping markets set to gap up after BJP’s landslide victory in Uttar Pradesh. Also Data released by the CSO last friday showed – industrial production (IIP) rose 2.7% in January after contracting by 0.4% in December which adds more fuel to the extreme positive sentiment. Lets do the top down analysis to understand the current state of the market.

Nifty Futures Monthly Charts

Monthly timeframe is currently onetimeframing for the last 4 months. Since mid of the year 2015 mix of onetimeframe up and down is a very common behavior which indicates that long term participants are driven sentimentally and reacting to all possible news events and pressing the markets higher and higher. Despite onetimeframing on the monthly timeframe nifty is trading in a range 8000-9000 for the last 10 months and balancing there which indicates that longterm players are not aggressive at this juncture. Long timeframe players need to do a significant breakout above this consolidation band and sustaining above the balance is going to be a tough task for the long term momentum buying to kickstart.

Nifty Futures Weekly Charts

Weekly timeframe indicates how the intermediate timeframe players are positioned. On the weekly charts nifty futures are onetimeframing for the last 7 trading weeks and constantly making a higher high. However last three weeks we are still trading in a range between 8800-9000. Any price pullback into 9000 range after the sentimental tuesday”s open could result in a trend reversal or a possible tighter consolidation between 8700-9000 range.

Nifty Daily Charts
Daily timeframe indicates how the shorter timeframe players are positioned. On the Daily charts markets are in a consolidation band between 8800-9000 zone for the last 13 trading sessions
as sequence of events political and federal events lined up for this month. which shows that markets are currently dominated by shorter timeframes and day timeframes mostly than any other higher timeframes. Volatility in the markets are highly muted despite large events lined up for this month. And more over we are dealing with the aged trend on the daily timeframe.

Our Take : If any large gap on the weekly charts are largely unsustainable in the short term. In case if it has to sustain, higher timeframers(larger,intermediate) have to be more aggressive than ever to push and sustain above the new territory. No further followup post the Tuesday’s gap up might bring nifty back to 8700 levels.

Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

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