This is the Nifty Trend Finder. This tool will find the Nifty trend for today or tomorrow instantly. You only need to put the price of the nearest call and put. It’s that easy. Mobile users need to scroll horizontally to see the full calculator below. Do not forget to bookmark this page.
How do you identify Nifty trend for today?
There are various ways of identifying the Nifty trend for today. One is with charts and the other one is without charts.
Using Simple Moving Average as Nifty Trend Finder
The simplest way to identify the direction of Nifty is to use a simple moving average. We provide an end of day chart below. On the chart, there is a red line, which is 5-day simple moving average. If the close of Nifty is above the 5-day SMA the short term trend is UP. Similarly is the close of the Nifty is below the 5-day SMA, the trend of the Nifty is down. This chart will be updated automatically every day after the market hours.
There is another blue line on the chart. That is a 20-day simple moving average. If the 5-day SMA crosses above the 20-day simple moving average that is a signal that Nifty is becoming freshly bullish. Till the 5-day SMA remains above the 20-day SMA we can say the medium-term trend is UP. Similarly, when the 5-day SMA crosses below or stays below the 20-day SMA we can say the medium-term trend is DOWN. In this way, we can identify whether it is a bull market or bear market using simple moving averages.
Using MACD as Nifty Trend Finder
The chart above also contains the Moving Average Convergence Divergence or MACD indicator. This can also identify the Nifty trend for today. When the MACD red line is above the blue line the short term trend is UP. Similarly, when the MACD red line is below the blue line, the short term trend is down. When both the lines are above zero then the medium-term trend is UP. On the other hand when both the lines are below zero then the medium-term trend is DOWN.
Without charts (Using Nifty Trend Finder)
We can identify the direction of the NSE index by using our simple calculator. This is a more easy method and even new traders can use this strategy.
How to use Nifty Trend Finder?
- To use this calculator you would like to use the CMP / LTP / price of Nifty index. For intraday enter LTP / CMP. For EOD enter the price.
- You need the options information for the actual Nifty for this month or for the week.
- Let me show you the way to use this calculator. Let’s imagine you wish to check the trend for the Nifty index for tomorrow.
- you may 1st see the close value of the S&P Nifty index. (Close value is 11840.45 as on 13th November 2019)
- When getting into the price, you may see 2 text fields (one for call option and another for put option value.)
- Enter the last close price for the call and put as shown in the image below.
- Then you’ll press the button FIND TREND.
- On the basis of the calculation, you may get the immediate trend for the Nifty index.
In the intraday trades, the Nifty index has clocked a high of 11894.85 providing a decent 55 points profit opportunity for the traders.
Example – End of day
On 13th November night when we calculated the trend for Nifty, the calculator asked to put the value of 11900CE and 11700PE. We had put values of 14th November 11900CE (Rs. 14.80) and 14th November 11700PE (Rs. 3.10). When we have calculated the direction using the Find Trend button it has shown the trend is UP.
Example – Intra-day
Now assume you just want to calculate the trend for day trading. You need to put the spot Nifty price. Suppose, at 10 AM on 14th November 2019, Nifty is trading at 11819.45. You just put the spot Nifty value of 11819.45. You will be able to see 2 new text fields for options. (11900 call and 11700 put). You need to input there price for the call and put. Let’s assume 11900 call is quoting at 4.50 & 11700 put is quoting at 1.10. We used both the options from the 14th November expiry. You simply put these prices at the appropriate fields of the calculator and hit the button Find Trend. You can see a message TREND IS UP.
Within the next 1 hour by 11:05 AM the Nifty index has made a massive rally and clocked a day high of 11894.85. This offered a 75 points profit opportunity for the intraday traders. Check the image below for the intraday chart for that day of Nifty.
These calculations are based on the trend derived from options prices. You can use other indicators as well to confirm the trend. Here I used a Relative Strength Index or RSI indicator for exits or timed entries. We got a trend is UP confirmation at 10 AM. From there market made a decent rally. We can exit the trade when we found the RSI has reached the overbought zone.
The Nifty trend finder is a simple to use tool that calculates the direction of the index with the help of options analysis. We have checked that most of the time it finds out the accurate trend. But for a more timely entry and exit, we suggest using a supporting indicator like the RSI. This can increase the accuracy to a large extent.