Next 20 days Outlook of Nifty based on Patterns from Historical Price Data and Option Chain Data as on EOD 05-Jan-2024

Patterns based prediction 

Jai Jinendra,

There are two types of data available for Nifty. 

1. Historical Price Data and

2. Option Chain Data

Every data contains patterns based on which it is possible to predict the expected movement of the market. Here I am trying to derive expected movement of Nifty in next 20 trading session which will be approx 1 month timeframe from every day. 

This blog is like central repository for me that I can refer in future to see how my research of the subject is progressing. Please don't use it for your trading. See the disclaimer below.

Next 20 days Outlook of Nifty based on Patterns from Historical Price Data and Option Chain Data as on EOD 05-Jan-2024

1. The historical price data as on EOD 05-Jan-2024 is matching the pattern with  9-May-2017 where in Nifty had appreciated 4.21%, corrected 0.21% and closed 3.44% from the opening levels of 10-May-2017 in next 20 days. The second nearest pattern is from 14-Aug-2018 where in Nifty had appreciated 2.84%, corrected -1.62% and closed 0.70% from the opening levels of 16-Aug-2018 in next 20 days. 

2. Option Chain Data of January expiry is pointing towards the range of 21450 to 21933.

The matter of concern is market is appreciating at very fast pace without any consolidation. Major support of Nifty is at 19800 levels which is far away from current levels. In between there is minor support at 21000 and 20000 which will not sustain in case of any correction.  

Note - 

1, If Prediction is pointing towards high, and market opens high next day then check the risk reward else avoid such trade. Same for opposite side.

2. Why sometimes system parameters provides two predictions on opposite sides?

Such scenario happens for different reasons (1) Weekly or monthly expiry has happened but complete rollover has not happened on the expiry day but operator has planned it for next trading day (2) Global uncertainties, when large players want to wait for overnight developments and then decide on direction to take.  (3) Sideways Markets.

3. Global Uncertainties and events like US FOMC meets etc  could cause some disruption. 

4. Why some of the expiries miss the predicted direction?

There is not much premium left due to premium decay near expiry so market may take opposite direction of prediction. Sometimes it takes direction based on next expiry data.

5. Instead of using my predictions for trading, use it as second opinion to supplement to your own analysis. 

6. Sometimes Market will continue to go higher even though the data is pointing lower levels. Please refer below post for explanation for the same.

https://www.marketprobabilityinsights.com/2023/11/predictive-analytics-and-trading.html

Disclaimer - This is not a investment or trading advice / recommendation. It does not look at Technical Analysis or Fundamental Analysis. It is based on quantitative approach using Predictive Analytics. The outcome could be prone to data issues or calculation issues. This post is for information purpose only.  I don't charge or offer any paid service. The higher probability percentage or ranking does not guarantee the actual outcome to be matching with that of predicted outcome. I am not SEBI registered. For more details on Probability Analysis refer the FAQ in link below https://www.marketprobabilityinsights.com/p/what-is-probability-analysis.html         


 

Location: India

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