Near Term Trend: ↑UP
Market update: Nifty opened positively today but quickly drifted into negative territory however buying support pushed it back up again and it made a high of 11350 before closing at 11340 levels ( up 40 points).
Nifty continued its upward journey & it remains overbought & negative divergence continues on major indicators. Today it appeared as if markets have got tired now, It has been moving non stop in one direction and some bit of correction is definitely overdue now. Level of 11400 in Nifty ( Sensex 37860) was a possibility and today Nifty almost touched it ( just fell short by few points).
We have been saying though price movements is consistently moving up, there are plenty of indicators warning caution at current levels. Today the daily RSI touched 74, last time it touched 74 was way back in Aug 2018 ( when Nifty was trading at 11750). Now if Nifty moves further from here, RSI will make a new high while Nifty would still be below Aug highs, now that is a very powerful negative divergence.Not saying its a confirmation of bearish trend (negative divergences can continue for long even for months) but just highlighting that its an important point and must be kept in consideration.
Coming back to this entire rise from 10K levels , today was the 94th day & we had mentioned in our previous posts that corrective moves usually last for 250-261.8% of previous moves. That gives us 95-99 days. Now if this entire corrective moves beyond 99 days that means it can extend till 300% (which is not very commonly seen and is rare but a possibility). 300% gives us 114 days. So this entire corrective move can further stretch for 1-3 weeks more (if not completed in next 1-4 days).
Another point to reckon is that in corrective moves, sometimes the last leg mimics the first leg. From the lows of 10K Nifty had risen to 10750 levels in 15 trading sessions (In Oct/Nov). That means ~750 points in 15 trading sessions & that had kick started this entire upmove/corrective leg. Now from the lows of 10600 (in Feb) Nifty has exactly risen 750 points ( 10600-11350 today) and that too exactly in 15 days. So we have one more strong indicator here but again we are not saying that its a confirmation signal for a trend reversal, all we are saying is that there are too many indicators pointing that this could be a critical area ( both in terms of price and time). So be watchful.
Happy Trading!
Market update: Nifty opened positively today but quickly drifted into negative territory however buying support pushed it back up again and it made a high of 11350 before closing at 11340 levels ( up 40 points).
Nifty continued its upward journey & it remains overbought & negative divergence continues on major indicators. Today it appeared as if markets have got tired now, It has been moving non stop in one direction and some bit of correction is definitely overdue now. Level of 11400 in Nifty ( Sensex 37860) was a possibility and today Nifty almost touched it ( just fell short by few points).
We have been saying though price movements is consistently moving up, there are plenty of indicators warning caution at current levels. Today the daily RSI touched 74, last time it touched 74 was way back in Aug 2018 ( when Nifty was trading at 11750). Now if Nifty moves further from here, RSI will make a new high while Nifty would still be below Aug highs, now that is a very powerful negative divergence.Not saying its a confirmation of bearish trend (negative divergences can continue for long even for months) but just highlighting that its an important point and must be kept in consideration.
Coming back to this entire rise from 10K levels , today was the 94th day & we had mentioned in our previous posts that corrective moves usually last for 250-261.8% of previous moves. That gives us 95-99 days. Now if this entire corrective moves beyond 99 days that means it can extend till 300% (which is not very commonly seen and is rare but a possibility). 300% gives us 114 days. So this entire corrective move can further stretch for 1-3 weeks more (if not completed in next 1-4 days).
Another point to reckon is that in corrective moves, sometimes the last leg mimics the first leg. From the lows of 10K Nifty had risen to 10750 levels in 15 trading sessions (In Oct/Nov). That means ~750 points in 15 trading sessions & that had kick started this entire upmove/corrective leg. Now from the lows of 10600 (in Feb) Nifty has exactly risen 750 points ( 10600-11350 today) and that too exactly in 15 days. So we have one more strong indicator here but again we are not saying that its a confirmation signal for a trend reversal, all we are saying is that there are too many indicators pointing that this could be a critical area ( both in terms of price and time). So be watchful.
Happy Trading!
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