Near Term Trend: ↔ (sideways with a positive bias)
Market update: Nifty opened at par inspite of a massive 300 point fall in Dow overnight however it kept struggling entire day at its familiar resistance of 10930 and crashed almost 110 points in last hour trading to 10810 levels before finally closing at 10831 (down 90 points).
Nifty broke below its recent support zone of 10840-50 which has been supporting market since last so many days. So can we conclude that Nifty is in a bearish trend and has started a fresh leg downwards? We don't think so. Fall of last 2 days which we have seen is not convincing enough. Not only its lacking momentum, any sort of direction or purpose is totally missing from it. The entire fall from 10987 ( Monday) till date is looking like a A-B-C corrective. If you look at hourly charts you can see "A" leg of this corrective lasted for ~130 points ( from 10987 to 10860 yesterday) and "C" today leg also consumed "130" points as well ( high of 10940 in morning to 10810 low it touched around 3PM). Of course we can see some more weakness from here but I wont be surprised if Nifty takes a sharp U turn from these levels ( there is a strong possibility of same).
Apart from the corrective nature of the fall there are other indicators like RSI which are giving strong positive divergence and in the current scenario (in our opinion) we do not see much room for Nifty to go down from here. We had mentioned yesterday that as long as 10840 level is held there is a chance of markets giving one more push on the upside. Please keep in mind that support levels are important but the way they are broken or taken out matters a lot. Nifty may have broken out 10840 today but fall was not at all convincing especially the last hour fall looked like an "after thought". We need to see more weakness from here below 10800 -10750 levels to convince ourselves that its actually the beginning of a fresh bear trend.
In nutshell, for now, todays fall is just part of the same consolidation or choppiness which is going on since last so many days and it will be premature to conclude that market have broken free and a new trend has started down. Need more weakness/fall from here ( that too with momentum and force) to conclude the same.
Trading Recommendations: Markets are being deceptive and will continue to remain so for some more time. This is a difficult period for trading and traders who try to trade on both sides( bull one day and bear next day) are likely to lose a lot. If someone is holding Shorts he should book profits at these levels and longs can still be held keeping 10750 as SL.
Thanks & Happy Trading!!
Market update: Nifty opened at par inspite of a massive 300 point fall in Dow overnight however it kept struggling entire day at its familiar resistance of 10930 and crashed almost 110 points in last hour trading to 10810 levels before finally closing at 10831 (down 90 points).
Nifty broke below its recent support zone of 10840-50 which has been supporting market since last so many days. So can we conclude that Nifty is in a bearish trend and has started a fresh leg downwards? We don't think so. Fall of last 2 days which we have seen is not convincing enough. Not only its lacking momentum, any sort of direction or purpose is totally missing from it. The entire fall from 10987 ( Monday) till date is looking like a A-B-C corrective. If you look at hourly charts you can see "A" leg of this corrective lasted for ~130 points ( from 10987 to 10860 yesterday) and "C" today leg also consumed "130" points as well ( high of 10940 in morning to 10810 low it touched around 3PM). Of course we can see some more weakness from here but I wont be surprised if Nifty takes a sharp U turn from these levels ( there is a strong possibility of same).
Apart from the corrective nature of the fall there are other indicators like RSI which are giving strong positive divergence and in the current scenario (in our opinion) we do not see much room for Nifty to go down from here. We had mentioned yesterday that as long as 10840 level is held there is a chance of markets giving one more push on the upside. Please keep in mind that support levels are important but the way they are broken or taken out matters a lot. Nifty may have broken out 10840 today but fall was not at all convincing especially the last hour fall looked like an "after thought". We need to see more weakness from here below 10800 -10750 levels to convince ourselves that its actually the beginning of a fresh bear trend.
In nutshell, for now, todays fall is just part of the same consolidation or choppiness which is going on since last so many days and it will be premature to conclude that market have broken free and a new trend has started down. Need more weakness/fall from here ( that too with momentum and force) to conclude the same.
Trading Recommendations: Markets are being deceptive and will continue to remain so for some more time. This is a difficult period for trading and traders who try to trade on both sides( bull one day and bear next day) are likely to lose a lot. If someone is holding Shorts he should book profits at these levels and longs can still be held keeping 10750 as SL.
Thanks & Happy Trading!!
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