Medium Term Trend: ⇊Down (Changes to UP above 11620)
Black Monday: Nifty had a disastrous opening to the week and crashed more than 250 points to close at 11250 levels. In the process Nifty also broke and close below our medium term pivot level which is means the medium term trend has turned 'Negative' or 'Down' as well.
In the previous post we had mentioned that :
'Failure to do so (move above 11600), on the other hand, could push Nifty towards 11350 where we expect immediate support. Below 11300-275 we are looking at extended correction which could take Nifty much lower (towards 11K levels)'
We were expecting markets to take support in the 11275-11325-11350 band and resume its uptrend thereafter however todays ferocious fall has made couple of important changes on the chart which should not be ignored. Firstly now this downmove is not appearing like a consolidation or corrective move but a fresh impulse on the downside. Secondly since we have closed below 11275 it is highly likely that we move further down from here. Lastly the previous downswing ( 11185) assumes a lot of significance now, if market breaks below it tomorrow ( and the chances are it will) then we will have a faster retracement of last rally in just 4 days ( move from 11185-11620 had taken 5 days).
In light of the above its very risky to continue holding the long positions and it seems there is still plenty of steam left in this downmove and we can still fall further from here hence be careful. Stay away from entering long positions and try to sell on rise ( with proper SL of course).
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