NIFTY prediction for tomorrow 31 May 24

30 May

As we discussed, Nifty had a bearish structure; It has fallen by 287 points.

If we look at the chart now:
The market is trading in the bearish zone below 200 EMA. The market has taken support from the 0.50 Fib level while making a Morningstar pattern with a very nice volume spike. Price is trading below EMAs, showing a weak bull structure.

If we look at the OI data:
PCR = 0.53, which has fallen from 0.63, shows a market bearish structure. 22500 is going to be MaxPain. There is significantly more CE writing than PE writing, which shows that, right now, big players are just pushing the market to the downside.
I am expecting:
Case 1: Inside the Orange trendline, the market is going to be sideways in the range 22465-22613.
Case 2: If the market breaks 22465 to the downside, we might see more bearishness to lower levels of 22200.

Reasons:

1. RSI < 40 falling from the upside shows a good bearish strength.
   
2. RSI showing Bullish divergence.
   
3. Price < EMA(13,200), which indicates a bearish market.
   
4. The market has formed a lower high lower low structure in 15-min TH that indicates the market is bearish unless the market tends to form a Higher-High.
   
5. PCR = 0.53 indicates huge bearishness.
   
6. Price < VWAP shows that a weak market structure can lead to a bearish market.
   
7. The market is making Morningstar star, which might force the market to hold the 22465 level.
   

Verdict: Bearish or Sideways

Plan of action:
Case 1: Sideways: Sell 22450 PE & 22650 CE (Hedge it with 30/-)
Case 2: Bearish: 22400 CE (Hedge it with 30/- CE) if the market continues bearish momentum.