Nifty Medium term

Back in March we had carried an update on the Nifty spot for the short to medium term based on the logic of market profile.

You can catch a glimpse of that post from March 5, here.

In that post we had strongly argued about the importance of the 5550 level from a medium term perspective, making a point that if we closed above 5550 we should make it to 5900 and maybe more.

Here is an updated chart post that commentary on March 5.

This is a weekly bar chart of the Nifty spot. The rectangle in blue is the development of the profile from that date in march. We see :

a) The market stalling the upmove at the developing Point of control ( maroon line) at 5900.

b) One time frame control of the sellers from the 5900 level on the weekly time frame

c) First signs of excess this week from lower levels, which were the same as the signals picked up from 5177 back in Feb

d) Another weekly close above the 5550 level will confirm this recent excess and put the market back on the road to 5900.

Now let's turn out attention to the daily chart.

The chart above is a daily chart of the Nifty spot, having the daily point of control ( not visited) and parallel trend lines :

a) The upmove of June to November of last year has been replaced by two parallel trend lines of the same magnitude, extending down in sync with the older move.The extensions of the duplicated lines are now at 5633 and 5348

b) 5919 represents the end of the first lower parallel line from where it can be argued that momentum shifted lower. 5919 was revisited during the latest rise in March-April.

c) 5633 is the first lower extension also near the top of the brackets in feb-march as well as the one developing now.

d) 5348 is the lower end of the bracket and a move below this in march got supported by the daily POC below, creating excess as in the first chart above.

Should the daily violate 5348 now strongly on closing basis, we should see a bigger slide ahead.

The market is currently resting near the 5484 POC fairly priced at the daily.