Nifty Broader Outlook

Nifty:- Nifty has been moving inside a rising channel for the last 10 year. Few months back in July it has retested its upper trend line of the channel level around 12100 and from there it started falling. Inside this raising channel, it has also created one more raising channel. On weekly chart nifty has moved below the support trend line of the rising channel and trading below the channel, that signals the fall will continue in the index and may take support at the support trend line of the big rising channel (9000). The 9000 level is also a major support level as it was resistance in 2015 and 2016. Bearish Divergence on MACD with bearish crossover signals the fall may continue for some more period of time.

Second Observation:- Every Time Market closed below its 12 Months Exponential Moving Average it had taken support at 50 Months Exponential Moving Average and resumed its primary trend(uptrend). The second thing we can also look is that the MACD always gets crossed below the Signal line when the market closes below the 12 months moving average. Last Month the same scenario has arisen,The Monthly candle closed below its 12 Month Moving Average and MACD had crossed below the Signal Line. Currently, the 50 Month Moving Average is at around 9700. This signals the market may fall to this level.

Third Observation:- We have seen the Death Crossover on the Daily Chart of Nifty ( 50 EMA Cross below 200 EMA) that signals market has entered into a long term bear market. We have also seen some developments on the Weekly and Monthly chart. On Weekly, Chart Nifty is below its 100 Moving Average and on Monthly Chart Nifty is below its 20 Moving Average after around 4 yr. This type of development on the bigger time frame triggers the negative signals on the market.

On the weekly chart, the 200 MA(9770) is an important support for the nifty as it has never sustain longer below the 200 WMA so it becomes crucial support for the nifty. And on Monthly Time frame 50 MA(9700) is crucial as nifty takes support on the 50 MA on the monthly chart and it has never sustained below 50 MA on monthly bases. This means the 9700 to 9770 will be important for nifty.

As per the current scenario, 10637 is crucial for the nifty if Nifty break below and close below this level it will open the door to 10000.

After Observing all this development of different time frame we are getting a negative outlook on the market.