Saturday, September 12, 2020

Week of September 14 to 18,2020

 This is what we had observed last week: "A swift recovery will indicate that there is strength in bulls. A weakening to 50 SMA will indicate that the underlying strength has begun to shift to the bears. No doubt a recovery cycle will still be there, but I would be very circumspect.If 11111 is breached and Nifty closes below that, then all bets are off. Currently I feel that possibility is a little remote."
Nifty opened at 11359 on Monday ( September 07 ) and gradually moved down to 11185 on  Wednesday  (September 09 ). That is, just 31 points above 50 SMA value of 11154 on September 09.On the same day, 20 SMA was at 11405. So we conclude that Nifty had considerably weakened and moved towards 50 SMA.
As said last week, the next recovery sub-cycle is still on and we saw Nifty recover from 11185 on Wednesday to    close at 11464 on Friday ( September 11 ) above the 20 SMA level of 11427.
So the next  bullish sub cycle has started.But let us bear in mind that since May 26 2020, Nifty had never reacted to the level of 50 SMA. It had always taken support on 20 SMA. That is did so on September 09 tells us that big players have started taking profits from their medium term bull positions.Such weakness is always a precursor to a top formation in not so distant future.
Let us see some past examples...

So we see the foot prints of Knowledgeable selling here...

Look at the first quarter of 2020...

Need not elaborate more, need we?

Let us focus on the  upcoming week..

80% retracement is 11446. Nifty closed above it at 11464.
Fibo extension points to a target of 12118.
Time cycles point to a date of September 21 with a five day orb. So 18 to 28 September is an important time band for a top.
Larger cycle has completed 29 days.
Within that, second sub cycle started on August 14 and ended on September 09.We are on the third sub cycle now.
This cycle will slowly begin to become bullish and most probably may take out 11794 on the upper side.
Cycle may end between September 18 to 28, with a significant top in the making.

This is just our analysis for education purpose. Please do your own research and consultation before taking any financial decisions. 

Let us look at what the planets are indicating..
Ketu is moving out of Sagittarius and Rahu out of Gemini. Ketu in Mercury star of Scorpio could trigger negativity.
This is what happened in 2002, when Ketu entered Scorpio..

Ketu is about to enter Scorpio, post September 20, 2020.So medium term caution is warranted.
Jupiter becomes direct on September 13,2020. Another negative indicator for the market. Jupiter is the biggest Bear of all planets. 
But effects may not manifest instantly. It may take at least 10 days minimum.
Meanwhile there are other short term bullish combinations...
Sun opposes Neptune and Sun trines Pluto. Both have the tendency to pull up the markets to a new crest within the next 10-12 days.
As we mentioned last week, Volatility can only increase from here for a small period. Astro technically the market looks to enter its lag...Trade with absolute caution and discard weak stocks sooner.

All the best.

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