Medium Term Trend: ↑(UP)-
Market update: Nifty had a volatile day today , it opened flat went on to hit 11800 and then crashed to 11630 levels ( almost 170 points down from days high), It closed at 11641 down 80 points.
Yesterday we had mentioned that even though Nifty has closed above 11700-720 levels, the move has come only at the fag end of the session and the 'island reversal' area is also not filled so we need to see sustained trading above 11740-11750 levels to conclude if Nifty is ready for another move on the upside.
Though Nifty opened and traded strong initially it failed to sustain above 11750 and dropped back at 11720 levels and then in the last 30 mins it just let go. We needed a close above 11750 levels and now that we don't have it , theres a chance that entire pull back of yesterday was a mere pull back and Nifty probably will go down again.
If we see further weakness below 11620-610 levels tomorrow then Nifty is going to test 11550 levels once again and this time there is a very high probability that it will be broken but keep in mind the trend of market will remain up till the time 11450-470 level is not taken out so in a way the importance of 11550 is reduced now to some extent.
Last 3 days the call and pull writers have suffered a great deal. 9/10 times option writers have upper hand and they seldom lose because of time decay but this month was an exception & option writers were seen running for covers in all directions.
In nutshell, even tough market is trading in bullish zone , don't be tempted to buy yet. wait for market to give a clear signal and then only buy. Weakness below 11560 levels can take market down to 11450-75 levels and only when this level breaks can we expect more weakness to follow. VIX is sitting at 23+ levels and the choppy and volatile moves we are seeing since last few days can be expected in future as well.
Happy Trading!
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