Stock Phoenix’s Nifty analysis for the Month of January – 2020

Fibonacci drawing: High – 5th of July and low which made on the 20th of December.

Nifty on 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 :

As predicted in last month’s blog, Nifty respected all the levels of Fibonacci and we ended up making a good amount of profits.

As the previous drawn Fibonacci Levels crossed 100% levels and gave the next target, we are drawing a new Fibonacci series with the short term. the previous swing low and swing high has been taken into consideration. Now Nifty is close to a lifetime high as well as 100% levels of Fibonacci. Now breaking these levels will lead to the next round of targets and downside targets will remain as per the levels are drawn.

Currently, Nifty is at the trading between the levels of 100% and 78.60%. Any breaking of 100% will open the doors for the next level of target of 12402.

Targets for the Month of January- 2020

As the Nifty is at the lifetime high levels and it is not able to cross the high which has made on the 20th of December. It tried to cross multiple times, yet the selling pressure and other news affected the market. Now if Index crosses the lifetime high then we can expect the next two targets very easy in the month of January itself. At the same time, chances are high to hit the two levels on the downside as well. The Targets numbers are clearly defined in the above-embedded picture.

At the same time, the gap between 100% and 61.80% is too high, so we have arrived at the intermediate support with the help of 78.60% and this number comes at 12195. So the upper Nifty has to stay above 12195, If we break these levels, the downside range is very high which is at 12117.

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

Nifty has tried to break lifetime high thrice recently. But it failed to cross the high. On the first week of expiry, Nifty was all set to open gap up and give a new high. But this was cancelled due to global news and sharp sell of witnessed in the market. Now Index has a kind of bearish candle on the closing. In the second week we will get the trend confirmation and if we need to cross the high, then it should happen at the start of the second week. Meanwhile, if we break the levels of 12195 on the closing basis, then we will see correction till the levels of 12117 and below this level, we will see further weakness.

If the current Global news goes down or if it does not affect the Indian market, then we may expect a huge buying coming in from various investors. On the Monthly expiry, Nifty is on bullish mode and the support is seen at 12200 and strong support is seen at 12000. Resistance levels are seen at the levels of 12500. At the same time if we ended up in Global negative news, then that trigger sell-off and most counters and we will end in the red as is it is a bit evident with the help of option chain as the major support is seen at 12000 only.

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 the Option chain.

Weekly Expiry – 09th of January

We can see a good amount of Call writing seen on last Friday and not much put writers are active. Nifty has triggered the sell off due to the Global news. And still, the major support for Index is seen at the levels of 12200 only. Any Put unwinding on Monday will lead to weakening the support levels and we can expect the Friday low getting broken and head towards the next level of downside targets. If we hold above 12200 then we can expect some sort of recovery and the lifetime high will be the next round of resistance for Nifty. Stay tuned with Stock Phoenix Telegram Channel for more live updates.

Monthly Expiry

It’s too early to predict on Monthly Expiry. The overall PCR ratio suggests neutral to Bullish. As of now, we could see strong support is getting built up in the zones of 12200 and 12000. Resistance is seen till the levels of 12500 and if Nifty stays above 12200 then we can expect the Nifty to travel high after beaking the lifetime high.

Immediate Target and resistance

  • Upside Targets: 12293, 12402 and 12470 (Above 12195).
  • Downside Targets: 12117, 12063 and 12008 (Below 12195)
News that will affect the Nifty Movement

As you are aware that we are on the series of news is coming from the Central government and Global news as well. Keep a tab on the Global news majority for the month of January and this will affect Index.

Conclusion form Stock Phoenix :

We see Index taking a pause at this phase and stay on consolidation mode or a small correction in the near term and expecting the index to break the lower side due to series of Global new flowing in. Recovery for the small-cap and Mid Cap has started in a good phase in the new year. Let’s wait and how and what market shows ahead for us. Play safe on the intraday and avoid carry forwarding any kind of CE option for the next day. And we have a very good time on the Small Cap and Mid Caps on the investment side.. And it is a good sign that we can get very good stocks at an attractive price. As already index is close to the lifetime high, the recovery of Mid Cap and Small-cap is long due.

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