Near Term Trend: ↓ Down
Market update: Nifty Opened up at 11080 levels however couldn't sustain above it and traded below it for most part of the day. It made a late dash towards the close but failed to close above it and in the process closed flat.
Today Nifty made a second consecutive Doji candle (Doji signifies indecisiveness) and after a strong bullish candle, 2 consecutive doji candles are warning caution at current levels.
Nifty OI remains at records low and today it shed even more OI ( now sitting at 1.45 crores). We had mentioned yesterday that move from 10585 (last 10 days) is clearly looking a corrective move ( this is evident from the fact that even after 10 days Nifty has failed to retrace the previous move which had taken only 8 days). Now point to note here is that even the previous move was a corrective move (from 11118 to 10585) as well.
Now coming back to current 10 days move (from lows of 10585) if you analyse it carefully you can see its a ABC move. A leg started from 10585 and went on to hit 10880 levels in 4 days, after which we had B leg which was an irregular correction and went up to 10940 and ended at 10785(this was a major point of confusion and am sure must have confused lots of traders). Now we have C leg which started from 10785 and made a high of 11088 today (it has also taken 4 days).
So here we have:
A leg = ~300 points (10585 to 10880) 4 days
C leg = ~300 points (10785 to 11088) 4 days ( today was the 4th day)
Both legs are exactly similar price wise and time wise & If this is right then we should see a sharp move down from here but keep in mind a new trend on the downside will begin only when Nifty break below 10785 in next 4 days ( ideally in 3 days by coming Tuesday). If Nifty falls from here but fails to take out 10780 levels then that would mean corrective leg on the upside will resume. In case Nifty doesn't fall and make a new High then most probably this ABC correction is taking some other shape ( other than a common zigzag which we are assuming right now).
So in nutshell Keep a tight watch on 10780, if it gets broken by Tuesday then the chances of this entire consolidation (which we are witnessing since last 3 months) getting over and Nifty starting a new leg on the downside will increase manifolds.
Happy Trading!
Market update: Nifty Opened up at 11080 levels however couldn't sustain above it and traded below it for most part of the day. It made a late dash towards the close but failed to close above it and in the process closed flat.
Today Nifty made a second consecutive Doji candle (Doji signifies indecisiveness) and after a strong bullish candle, 2 consecutive doji candles are warning caution at current levels.
Nifty OI remains at records low and today it shed even more OI ( now sitting at 1.45 crores). We had mentioned yesterday that move from 10585 (last 10 days) is clearly looking a corrective move ( this is evident from the fact that even after 10 days Nifty has failed to retrace the previous move which had taken only 8 days). Now point to note here is that even the previous move was a corrective move (from 11118 to 10585) as well.
Now coming back to current 10 days move (from lows of 10585) if you analyse it carefully you can see its a ABC move. A leg started from 10585 and went on to hit 10880 levels in 4 days, after which we had B leg which was an irregular correction and went up to 10940 and ended at 10785(this was a major point of confusion and am sure must have confused lots of traders). Now we have C leg which started from 10785 and made a high of 11088 today (it has also taken 4 days).
So here we have:
A leg = ~300 points (10585 to 10880) 4 days
C leg = ~300 points (10785 to 11088) 4 days ( today was the 4th day)
Both legs are exactly similar price wise and time wise & If this is right then we should see a sharp move down from here but keep in mind a new trend on the downside will begin only when Nifty break below 10785 in next 4 days ( ideally in 3 days by coming Tuesday). If Nifty falls from here but fails to take out 10780 levels then that would mean corrective leg on the upside will resume. In case Nifty doesn't fall and make a new High then most probably this ABC correction is taking some other shape ( other than a common zigzag which we are assuming right now).
So in nutshell Keep a tight watch on 10780, if it gets broken by Tuesday then the chances of this entire consolidation (which we are witnessing since last 3 months) getting over and Nifty starting a new leg on the downside will increase manifolds.
Happy Trading!
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