Near Term Trend: ↓ Down
Market update: Nifty opened almost flat (inspite of an overnight rally in US stocks and strong Asian markets) but recovered later and finally closed strong at 10880, up almost 90 points.
We had mentioned that 10800-10850 is a very key resistance zone for Nifty and if Nifty is able to cross it with momentum then probably we can see higher levels in Nifty. Nifty did cross it however the momentum was not very convincing (inspite of 90 points rally today). Ideally Nifty should have broken 10850 on Friday itself or in the first hour of trading today. So even though 10850 has been broken its not done convincingly ( as we would have liked to see) hence we are keeping the near term trend as down only, we need to see further strength in market tomorrow above these levels to change the trend to 'UP'.
At the time of writing this post, Dow future is up 160 points and SGX Nifty is trading strong, however its looking difficult that Nifty will be able to add any significant gain immediately from current levels simply because markets have turned overbought on short term charts so little bit of cooling off is expected.
The fall we saw from 11018 to 10585 though it was in one single line it was not very convincing now this rise which we are seeing from 10585 is carrying the same characteristics too and again is not very convincing ( specially the last 2 days). This could be on account of short covering, when Nifty had broken 10600 levels few days back many traders and brokerage houses had gone short but market reversed the very next day forcing traders to cover those short position. It will be interesting to see if market can see some followup buying once the short covering is out of way.
Having said this, the advance decline ratio continues to be positive running 4th day in a row which is a positive sign and PCR continue to be in favour of bulls.
Technically speaking, Like we mentioned above that this rise is also carrying the same characteristics which we got to see in the previous fall. Such similarity is symptomatic and indicative of triangular movement. Tt seems since hitting the low of 10583 earlier this month ( which is marked as wave 'X') markets are making a triangle which is currently in 'C' leg & this pattern can continue till the pending 2 more legs D & E finishes too (but keep in mind D& E leg can be pretty small and finish quickly).
B leg retraced almost 100% of the A leg and now C leg has retraced almost 50% of the B leg. We need to see if this C leg ends here and D legs open up again.
Happy Trading!
Market update: Nifty opened almost flat (inspite of an overnight rally in US stocks and strong Asian markets) but recovered later and finally closed strong at 10880, up almost 90 points.
We had mentioned that 10800-10850 is a very key resistance zone for Nifty and if Nifty is able to cross it with momentum then probably we can see higher levels in Nifty. Nifty did cross it however the momentum was not very convincing (inspite of 90 points rally today). Ideally Nifty should have broken 10850 on Friday itself or in the first hour of trading today. So even though 10850 has been broken its not done convincingly ( as we would have liked to see) hence we are keeping the near term trend as down only, we need to see further strength in market tomorrow above these levels to change the trend to 'UP'.
At the time of writing this post, Dow future is up 160 points and SGX Nifty is trading strong, however its looking difficult that Nifty will be able to add any significant gain immediately from current levels simply because markets have turned overbought on short term charts so little bit of cooling off is expected.
The fall we saw from 11018 to 10585 though it was in one single line it was not very convincing now this rise which we are seeing from 10585 is carrying the same characteristics too and again is not very convincing ( specially the last 2 days). This could be on account of short covering, when Nifty had broken 10600 levels few days back many traders and brokerage houses had gone short but market reversed the very next day forcing traders to cover those short position. It will be interesting to see if market can see some followup buying once the short covering is out of way.
Having said this, the advance decline ratio continues to be positive running 4th day in a row which is a positive sign and PCR continue to be in favour of bulls.
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| Nifty |
B leg retraced almost 100% of the A leg and now C leg has retraced almost 50% of the B leg. We need to see if this C leg ends here and D legs open up again.
Happy Trading!
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