Ichimoku Indian NIFTY Stock Market Update Feb 14, 2016

Ichimoku Indian NIFTY Stock Market Update Feb 14, 2016

Since I in India vacationing with my family, I figure it would be a good time to give a detailed update on the Indian Stock Market.

Like most Global markets, the Indian stock market has been going down.

What does this mean?  Here is the 3 main states that the market can be in when someone mentions that the market is going down.

  1. Pull back.    The trend can be bullish and experience a short term bearish (down) pull back.   The pull back is profit taking and once the profit taking finishes, the natural bullish trend can resume.
  2. Consolidation Pattern:    The top of the consolidation pattern was reached and now price has bounced off the top of the pattern which is a major resistance and now is going to the major support which is bottom of the consolidation pattern.    Price will go back and forth until either the major resistance or support is broken.
  3. Trend:    The trend is a major bearish trend which is continuously going down.

So which one is the Indian market in at this time?

Below is the monthly chart for the Nifty 50 provided by eSignal.     The chart is illustrates that the Indian market has been going through a bullish trend from Oct 2013 when it broke out of a consolidation pattern.    Now, there is a high probability that the market will engage in a major pull back.    This major pull back is being controlled by the resistance at 7516.    The next major support is at 6824.00   Here is our forecast:

  • Price will reach the support at 6824 by March 1, 2016.
  • Once the support is reached, price will go back to the resistance of 7516 by June 27, 2016.
  • Once the resistance is reached, price will head back to the support at 6824 entering a long term consolidation pattern until either the support or resistance is broken.    Every tine price reaches the support at 6824, the probabilities will remain high to break it and price head to the cloud.

This is our forecast.    Everything in the forecast will be verified with the lower time frames.

The Indian traders that love Fibonacci, the Ichimoku support at 6824 matches the 61.8% Fib value too.

2016-02-14_nifty_monthly

Below is the weekly chart,     The chart is showing that the weekly time frame is bearish which is causing the probabilities of a major pull back on the monthly time frame to increase.

2016-02-14_nifty_weekly

Now that we have our forecast and it indicates the ‘next step” is to get to the support, we have to verify the long term forecast with actions from the lower time frames.

After doing multiple time frame analysis, the 120m time frame is the controlling time frame.   This the lowest timeframe that has been controlling the trends and pull backs since the beginning of the year.

Below is the current 120m time frame.   The minor and major resistances for the 120m have been outlined.   At this time, the other time frames do not match these levels.   Therefore, this is no probabilities on which level price will “respect”.     The only thing we know is that as long as the resistance at 7189 holds, there is still a high probability to get to the long term support at 6824.

We will continue to look for short term bearish trade setup for individual stocks until the support is reached or the resistance is broken.

2016-02-14_nifty_120

 

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About the Author Manesh Patel