Stock Phoenix’s Nifty analysis for the Month of July 2019

Nifty @Fibonacci

We will study the Nifty movement with the help of Fibonacci numbers. It’s one of the moves important and powerful indicators that will help us to arrive at the Targets for the reversal trend. It’s drawn by arriving at the top and bottom of the trend and it’s drawn to arrive at the next set of support and resistance. The higher the Time Frame, the better the results. Here we have taken the Daily charts to draw the Fibonacci Numbers. The drawing remains the same until we get a new high or new low by Nifty. Numbers 38.2% and 61.8% are considered as very crucial in the Fibonacci series.

Nifty Analysis

The analysis is almost remains same as the month of June as the Index did not break any level and it stayed between the levels of 61.80% to 100%. As long these levels are broken, Index will have huge movement.

Nifty has made top at 12103 on 3rd of June and made low of 11108 on 14th of May. The index has to cross 12103 for the next level of Target 12483 which is the Fibonacci extension at 138.20%. Let’s talk about the current level. Currently Nifty is at the levels between 100% and 61.80%. Nifty has to cross the levels of 100% for the next level of the target on the upper side and it should break the level of 61.80 for the lower level for the downside targets.

As we discussed in last Month’s article, the level between 61.80% and 100% is very wide, we have to look for the support and resistance between these two zones. Let’s take a look at the different levels.

Nifty has support at the zones of 11850. This is the zone which was the previous lifetime high. As the zone between 61.80% and 100% is very big, 11850 will act as intermediate support and resistance. Now let’s look on the resistance and support zones for the Month of July.

Targets for the Month of July

As we now arrived at a support zone in between two Fibonacci Numbers, Now we can easily arrive at next set of target. If the Nifty stays above the zone of 11850, we can expect the first Target as 12000 , second target of 12100.Once the lifetime high is broken at 12103, the Nifty target is open till 12483. And the level 12100 will act as strong support for Nifty.

At the same time if the Nifty breaks the zone 11850 then we can see the first target as 11723 on downside and Index will start bouncing back again for the target of 11850. Any closing below 11723 will give room for downside to the levels of 11605 and 11488. Nifty will get stronger support at the levels of 38.20%.

What are the possibilities of Nifty crossing Make or Break in July?

Even though the Fibonacci numbers are very accurate, Fibonacci analysis does not tell anything about the timeline to achieving the targets. For the time frame, we have to take help of the Nifty Option chain. The near term target can be arrived with the help of Option chain.

Today is the first day of the month and we cannot arrive at the exact target for Index. However we can arrive at overall picture with the help of the Option chain writing. Looking at the option chain, we can arrive at the below inference.

Weekly Expiry

We can see good amount of support is getting built at the zone of 11800. Hence 11800 will act a support for the first week of July. And at the same time we have the overall at high numbers at the levels of 11900 and 12000.

However we don’t see any call writing happening at the levels of 11900. which tells us that the room for upmove above 11900 is open and index has possibilities to cross the 11900 and travel above 11950. And it may take hit at the levels of 12000. As per the Option chain as of 1st of July and closing above 11850 levels, we can see a upmove on 2nd July onwards.

Monthly Expiry

It’s too early to predict on Monthly Expiry. Overall PCR ratio suggests bullishness. As of now we could see resistance is getting built up at the zones of 12000. However it’s too early to arrive at this conclusion. However the good part is even on the monthly expiry the support lies at the zone of 11800. So chances of hitting the 12000 mark is high.

Immediate Target and resistance

  • Upside Targets: 11950 , 12000 and 12103 (Above 11850).
  • Downside Targets: 11800 and 11723 (Below 11850)
News that will affect the Nifty Movement

As you are aware that we are on budget week. So this factor will affect Movement of Index. So we have to keep this factor in the coming week. And based on the output from the Budget, the next move will decided. So overall we are eyeing at the volatile month ahead.

Conclusion form Stock Phoenix :

We see Index bullish on near term and expecting index to hit the 12K Mark and cross even 12103 based on the output form Budget. Let’s wait and how and what market shows ahead for us. Play safe on the intraday and avoid carry forwarding any kind of option for next day. And start your investment portfolio from now onwards as most of the Midcap and Smallcap are showing good sign of reversal.

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