Medium Term Trend: ↑(Up)
Market update: Nifty opened strong at 11850 however dropped immediately at 11800 levels and closed at 11750 levels ( down 40 points).
Today Index made a " Bearish belt hold pattern". A bearish belt hold pattern is one where opening price becomes the highest point of the day and the closing price is near about the lowest point of the day. It signifies weakness and indicates that probably bears are getting active again. It can have negative/bearish implications in case market start trading below its lowest point ( 11735).
Having said this, for now there is no change in the overall trend of the market and it remains on the upside & will remain up till the time 11520-11550 levels is not taken out by Bears that too in next 3 days ( before expiry).
We continue to believe that markets are overstretched and a correction can come anytime and it can be sharp and sudden however as long as the trend is up there is a chance that markets can still go higher and touch 11900 and even 12K levels.
Today the weekly closing has come below 11760 which was the previous all time high for Nifty and it should come as a disappointment for bulls who were hoping for a fresh rally once 11760 was taken out. Many traders have gone long above 11760 in last 1-2 trading session thinking all the resistances have now been taken out and Nifty should see higher levels from here. Well it can still see higher levels, we don't deny it but considering the massive rally of 1200 points which we have seen in last 45 days, one should be cautious and careful. If nifty crosses 11855 level ( todays high) then we can expect this rally to continue for now.
One should keep in mind that we have seen pretty much one sided move in last 40 days or so ( from lows of 10600) and the entire move is due to be corrected ( even if its bullish). VIX is moving up daily and has crossed 22 levels today, which again indicating that big players are bracing up for volatile moves in the coming days hence another reason to be cautious at current levels.
In Nutshell, be cautious at current level, weakness below todays lows and then below 11670-80 levels will invite further weakness in near term and if 11540 is broken in next 3 days then there is real danger of entire upmove getting over for time being. On the other hand, to continue with the bullish option, Nifty should conquer 11850 levels soon (which has become a formidable resistance now).
Happy Trading!!
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