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

Fibonacci drawing has been done on the new low which is made on the 5th of August

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 :

Nifty gave the very good downward movement on the Month of July. It has touched the 61.80 %, 50 %, 31.80%, and 0 levels and made further lows. Nifty has also made a low of 10782 on the 5th of August and made a good reversal. So the entire old series of Fibonacci numbers will get washed out and we have to write new Levels for the Month of August and the same has been done above.

Important Note:

Revised Fibonacci has been drawn with the help of the low made on the 5th of August. Valid if we don’t break the low of 10782.

Nifty has made the top 11981 on the 5th of July and made a low of 10782 on the 05th of August. More than 1000 points of difference between the two zones. We have drawn a new chart with the help of these numbers and we would be studying based on these new targets only. The index gave a good downward movement due to various news and the market was in completely one-sided movement. Now 10782 is a strong support zone.. If Nifty breaks the low of 10782, then we will have an open target till the zone of 10600.

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.

Currently Nifty is at the levels between 0% and 23.60%. Nifty has to cross the levels of 23.60% for the next level of the target on the upper side which is 38.20% and 61.80%. It should not break the low of 10782. Below 10782 we are looking at the crazy downside.

Targets for the Month of August

As we now arrived at a support zone in between two Fibonacci Numbers, Now we can easily arrive at the next set of targets. If the Nifty stays above the zone of 10782, we can expect the first Target as 11065, the second target of 11163 which is 200 days moving average which is very important. Once the important level of 11163 is taken out, then the Nifty target is open till 11243 and 11523. And the levels at 50% will not act as strong resistance.

At the same time if the Nifty breaks the zone 10782 then we can see the first target as 10700 and the second target as 10600 on the downside. The index will start bouncing back from the zones of 10600. Any closing below 10600 will give room for the downside to the levels of 10500 and 10400. If we look at the charts, ideally we have support at every 100 points below 10600 till 10000.

What are the possibilities of Nifty breaking the low or travel upside in the Month of August?

Nifty has made enough bottom in the Month of July and we are in oversold territory. some sort of technical bounce back should happen. However, it all depends on the National and Global scenario. If we don’t see any news which affects majorly, we can expect Nifty to hold the low and travel towards the north side and we should be seeing a good recovery from here on. If we end up getting some negative news, then we can plan for further downside targets as explained.

Even though the Fibonacci numbers are very accurate, the Fibonacci analysis does not tell anything about the timeline to achieving the targets. For the time frame, we have to take the help of the Nifty Option chain. The near term target can arrive 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 the overall picture with the help of Option chain writing. Looking at the option chain, we can arrive at the below inference.

Weekly Expiry – 14th of August

We can see a good amount of support is getting built in the zone of 11000. Hence 11000 will act as crucial support for the second week of August. And at the same time, we also have resistance at the levels of 11100. The overall PCR ratio is showing neutral sentiment. Now we have to see if Index holds 11000.

Monthly Expiry

It’s too early to predict on Monthly Expiry. The overall PCR ratio suggests bullish. As of now, we could see strong support is getting built up at the zones of 11000 and resistance at the levels of 11500. However, it’s too early to arrive at this conclusion. However, the good part is even on the monthly expiry the support lies in the zone of 11000. So the chances of hitting 38.20% and 50% are high and we may head even 61.80% which is 11523.

Immediate Target and resistance

  • Upside Targets: 11065, 11163, 11240 and 11523 (Above 11000).
  • Downside Targets: 10900, 10782, 10700 and 10600 (Below 11065)
News that will affect the Nifty Movement

As you are aware that we are on the series of news such as changes in Tax slabs, Fed Rate change, Quarterly results, downward journey of Auto Sectors, and other banking-related news. So this factor will affect the Movement of Index. So we have to keep this factor in the coming week. So overall we are eyeing at the volatile month ahead and more of recovery in the Market.

Conclusion form Stock Phoenix :

We see Index bullish on near term and expecting index to recover from the low and give some sort of relief. 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 the next day. And start your investment portfolio in the Month of August onwards. almost all the small-cap and mid-caps are fallen massively and still falling nonstop. Once we see a sign of recovery in Index, these also will follow the big boss and we should take advantage of this and start our strong holding on Investment for the next big round of move.

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