Near Term Trend: ↑UP
Market update: Nifty opened again in the green today (on the back of 200 point gain in Dow Jones) however couldn't sustain and dropped to 11435 levels and finally closed at 11456 ( down 65 points).
Markets were trading in overbought zone for last few trading sessions and like we had mentioned in our previous post that after 8-9 days of consecutive one sided moves, a reversal can always be expected ( today was the 9th day).
We have also been mentioning that time wise market is about to complete 261.8% retracement ( and that 250-261.8% is the generally the max which is observed however even 300% is possible which is rare). Ever since market completed 250% time ( day 94) we were telling traders to be cautious and yesterday mkt completed 261.8% and today we saw a small reversal or a pullback.
However inspite of everything it will be premature to say if market is done with upmove yet and the levels of 11600 will not be seen in immediate term. Today market has taken just a small step back and that doesn't change the overall structure of the markets and it still remains pretty strong However if selling pressure increases from here and market break below 11200 -11150 levels with strong momentum then probably we can say that medium term top has been put in place already.
Having said this the technical reading is still suggesting a bit of caution here and indicating a probability that Nifty hit the medium term top today/yesterday however it will be confirmed only when we see follow up selling from here that too with lot of momentum and force.
So keep observing markets for next few trading session and if its just a correction developing then it may finish in next couple of trading sessions and without much prices damage however if its a trend reversal then we might see some sharp moves.
Another important thing to note is that during last few months there was a complete disconnect between Dow and Nifty and both were moving independently.Now if one observe charts carefully he can notice that both are standing at same level (Nifty is just few %age points away from all time high & so is Dow & S&P). Even other global markets can be seen at same level hence theres an increased likelihood that divergence or lack of correlation we have been accustomed to seeing between Dow and Nifty is getting over and probably global markets are ready to move in tandem now. So its important to keep an eye on Dow now because what it does from here onwards can be significant and it can lead the way for other markets from now on.
Happy Trading.
Market update: Nifty opened again in the green today (on the back of 200 point gain in Dow Jones) however couldn't sustain and dropped to 11435 levels and finally closed at 11456 ( down 65 points).
Markets were trading in overbought zone for last few trading sessions and like we had mentioned in our previous post that after 8-9 days of consecutive one sided moves, a reversal can always be expected ( today was the 9th day).
We have also been mentioning that time wise market is about to complete 261.8% retracement ( and that 250-261.8% is the generally the max which is observed however even 300% is possible which is rare). Ever since market completed 250% time ( day 94) we were telling traders to be cautious and yesterday mkt completed 261.8% and today we saw a small reversal or a pullback.
However inspite of everything it will be premature to say if market is done with upmove yet and the levels of 11600 will not be seen in immediate term. Today market has taken just a small step back and that doesn't change the overall structure of the markets and it still remains pretty strong However if selling pressure increases from here and market break below 11200 -11150 levels with strong momentum then probably we can say that medium term top has been put in place already.
Having said this the technical reading is still suggesting a bit of caution here and indicating a probability that Nifty hit the medium term top today/yesterday however it will be confirmed only when we see follow up selling from here that too with lot of momentum and force.
So keep observing markets for next few trading session and if its just a correction developing then it may finish in next couple of trading sessions and without much prices damage however if its a trend reversal then we might see some sharp moves.
Another important thing to note is that during last few months there was a complete disconnect between Dow and Nifty and both were moving independently.Now if one observe charts carefully he can notice that both are standing at same level (Nifty is just few %age points away from all time high & so is Dow & S&P). Even other global markets can be seen at same level hence theres an increased likelihood that divergence or lack of correlation we have been accustomed to seeing between Dow and Nifty is getting over and probably global markets are ready to move in tandem now. So its important to keep an eye on Dow now because what it does from here onwards can be significant and it can lead the way for other markets from now on.
Happy Trading.
Do you see Nifty reaching 11600 before March expiry?
ReplyDeleteIt can but chances are greatly reduced now.
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