Nifty Signals Perfect Storm: Doji, NR7 & NR21 Point to Imminent Breakout

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Last Day Analysis can be read here 

Nifty Analysis: A Perfect Storm of Volatility Contraction Signals a Major Move

Nifty is currently at a critical inflection point, signaling a high probability of a significant directional move in the coming days. A rare confluence of price action patterns and timing cycles suggests that the current period of consolidation is about to end explosively.

1. Daily Chart: Extreme Short-Term Compression (Doji + NR7)

On the daily timeframe, Nifty has formed a powerful combination of two patterns:

• Doji Candlestick: A sign of pure indecision in the market, where the opening and closing prices are virtually the same.

• NR7 Pattern: This indicates that today’s price range was the narrowest of the last seven trading sessions.

Interpretation: The combination of a Doji with an NR7 pattern points to an extreme squeeze in short-term volatility. This suggests that traders are hesitating before committing to a new direction, and a breakout is imminent.

2. Weekly Chart: Major Volatility Squeeze (NR21 Pattern)

Amplifying the daily signal, the weekly chart is forming an NR21 pattern.

• What it means: The price range for the entire week is on track to be the narrowest in the last 21 weeks.

• Interpretation: An NR21 is a powerful indicator of major volatility contraction. Such prolonged periods of low volatility are almost always followed by a significant expansion in volatility, meaning a strong, sustained trend is likely to emerge.

3. Confluence of Timing Cycles: Gann and Astro Align

Adding another layer to this analysis is the convergence of key timing factors:

• Solar Eclipse Echo Date: Today’s date holds significance in astro-cycle analysis.

• Gann Seasonal Date: This coming weekend marks a Gann seasonal timing point.

The Big Picture: The fact that extreme price contraction (NR7, NR21) is occurring in alignment with both Gann and astrological timing cycles creates a powerful “confluence.” This suggests the market is building energy for a major move that is timed to occur very soon.

The Key Levels to Watch: Where the Bulls and Bears Take Control

The battle lines are clearly drawn. The direction of the breakout will be determined by these critical price levels:

• Bullish Trigger: Above 24,863
  A decisive move and hold above this level would signal that the bulls have won the battle, potentially launching a strong upward rally.

• Bearish Trigger: Below 24,729
  A break and close below this support level would indicate that the bears are in control, likely triggering a sharp sell-off.

Conclusion: Traders should be prepared for a significant increase in volatility. The current market condition is like a coiled spring, and the levels of 24,863 and 24,729 are the triggers that will release the stored energy.

Nifty Trade Plan for Positional Trade ,Bulls will get active above 24904 for a move towards 25063/25222. Bears will get active below 24746 for a move towards 24587/24428

Traders may watch out for potential intraday reversals at 09:31,10:36,01:20,01:59,02:45 How to Find and Trade Intraday Reversal Times

Nifty May Futures Open Interest Volume stood at 1.10 lakh cr , witnessing liquidation of 1 Lakh  contracts. Additionally, the increase in Cost of Carry implies that there was adding of SHORT positions today.

Nifty Advance Decline Ratio at 30:20 and Nifty Rollover Cost is @24321 closed above it.

Nifty Gann Monthly Buy Level : 24822

Nifty Gann Monthly Buy Level : 24669

Nifty has closed below its 20 SMA @ 24850 Trend is Sell on Rise till below 24900.

 

 

Nifty options chain shows that the maximum pain point is at 24800  and the put-call ratio (PCR) is at 0.95.Typically, when the PCR open interest ranges between 0.90 and 1.05, the market tends to remain range-bound.

Nifty 50 Options Chain Analysis

The Nifty 50 options chain indicates that the highest open interest (OI) on the call side is at the 24900 strike, followed by 25000 strikes. On the put side, the highest OI is at the 24700 strike, followed by 24600 strikes. This suggests that the market participants are expecting Nifty 50 to remain range between 24600-24900 levels.

In the cash segment, Foreign Institutional Investors (FII) bought 934 cr , while Domestic Institutional Investors (DII) bought 605 cr.

Traders who follow the musical octave trading path may find valuable insights in predicting Nifty’s movements. According to this path, Nifty may follow a path of 23037-23722-24408-25134-25860 This means that traders can take a position and potentially ride the move as Nifty moves through these levels.Of course, it’s important to keep in mind that trading is inherently risky and market movements can be unpredictable. 

 

 

Be patient. The market is constantly changing, and it’s important to be patient when trading. Don’t expect to make a lot of money overnight. Be patient and let the market work in your favor.

For Positional Traders, The Nifty Futures’ Trend Change Level is At 24920 . Going Long Or Short Above Or Below This Level Can Help Them Stay On The Same Side As Institutions, With A Higher Risk-reward Ratio. Intraday Traders Can Keep An Eye On 24827, Which Acts As An Intraday Trend Change Level.

Nifty Intraday Trading Levels

Buy Above 24824 Tgt 24864, 24910 and 24975 ( Nifty Spot Levels)

Sell Below 24777 Tgt 24729, 24700 and 24666 (Nifty Spot Levels)

Wishing you good health and trading success as always.As always, prioritize your health and trade with caution.

As always, it’s essential to closely monitor market movements and make informed decisions based on a well-thought-out trading plan and risk management strategy. Market conditions can change rapidly, and it’s crucial to be adaptable and cautious in your approach.

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