Near Term Trend: ↑UP
Market update: Nifty opened around 11470 and kept adding strength as trading progressed and closed at 11570, up 120 points.
Todays close assume lot of significance as the close has come above the recent high and above yesterdays high so that definitely is a sign of strength. All technical indicators continues to remain in 'buy' zone as well. However one thing which didn't seem right in todays rally was the negative divergences seen all around (on most time parameters and with most indicators). Daily RSI has shown a very strong negative divergence which calls for some caution at current levels.
Both Sensex and Nifty closed around recent high and it needs to be seen if market can build further strength over it or again slip back to below 11500 levels from here (If it happens then probability of a double top like scenario can arise).
Nifty has a good support at 11200-250 levels and till this level hold the near term trend will remain up only however one should also keep in mind that technically markets are overstretched and inspite of recent correction it remains on the overbought side. Looking at PE is sitting at 28+ levels now and last time it had reached 28+ was way back in 2008(6300) & then in 2018 (11750) and on both occasion we did see a good fall.
Market sentiments continues to be on very bullish side and euphoria is reaching extreme levels as we approach elections. Markets are probably factoring in BJP victory but how far elections can take markets that remains to be seen. Another thing to keep in mind is that since last 4-5 days market has seen a movement of 100-150 points on each day. Now this again could be significant factor as we move forward ( big movement can become new norm now).
In nutshell markets remains buoyant and trend remains on the upside however considering various other things there is also a probability of markets making a short term/medium term top so be cautious.
Happy Trading!!
Market update: Nifty opened around 11470 and kept adding strength as trading progressed and closed at 11570, up 120 points.
Todays close assume lot of significance as the close has come above the recent high and above yesterdays high so that definitely is a sign of strength. All technical indicators continues to remain in 'buy' zone as well. However one thing which didn't seem right in todays rally was the negative divergences seen all around (on most time parameters and with most indicators). Daily RSI has shown a very strong negative divergence which calls for some caution at current levels.
Both Sensex and Nifty closed around recent high and it needs to be seen if market can build further strength over it or again slip back to below 11500 levels from here (If it happens then probability of a double top like scenario can arise).
Nifty has a good support at 11200-250 levels and till this level hold the near term trend will remain up only however one should also keep in mind that technically markets are overstretched and inspite of recent correction it remains on the overbought side. Looking at PE is sitting at 28+ levels now and last time it had reached 28+ was way back in 2008(6300) & then in 2018 (11750) and on both occasion we did see a good fall.
Market sentiments continues to be on very bullish side and euphoria is reaching extreme levels as we approach elections. Markets are probably factoring in BJP victory but how far elections can take markets that remains to be seen. Another thing to keep in mind is that since last 4-5 days market has seen a movement of 100-150 points on each day. Now this again could be significant factor as we move forward ( big movement can become new norm now).
In nutshell markets remains buoyant and trend remains on the upside however considering various other things there is also a probability of markets making a short term/medium term top so be cautious.
Happy Trading!!
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