Near Term Trend: ↑UP
Market update: Nifty opened strong (once again) and kept trading above 11700 entire day however late bout of selling pushed it below 11650 and it closed at 11670, up 45 points.
Sensex today made an all time high and for a moment around 230PM it seemed even Nifty will follow suit but it missed it by 10 odd points. Markets today posted an shooting star candle on daily chart which is followed by a hanging man pattern (which it had posted on Friday). This again is a possible topping pattern which signify that probably bulls are losing steam and bears can take over however this is not the only time market has posted a topping pattern. Last few days market has been consistently indicating ( one way or other) that it may correct from these levels but on price chart there is absolutely no weakness whatsoever and markets continue to climb higher. So does it means markets will continue to go up like this and keep conquering higher levels? answer is absolutely no.
Markets may have posted a new high today (sensex) but overall the rise is too slow hence it will qualify as a corrective move only and the fact that we have a new high on sensex doesn't change the bigger picture.
In our previous post we had mentioned that recent move ( from lows of 10600) is wave C of ( ABC) and which is in its last leg (wave 5) & the wave 5 has measured exactly as wave 1 (both in terms of price and time). Today wave 5 has become bigger than wave 1 but that was always possible ( wave 5 ending around wave 1 was just a possibility and not a given). So technically we are still in wave 5 and once it ends we are looking for a deeper correction. Entire move from 10600 to 11740 should be corrected by atleast 38% to 50% which means 11150-11300). Now there are many who believes that market are in a pre election rally and will remain stronger till the time result comes out. It may be true but we continue to believe that markets can surprise with a sharp move down before that happens. Market has good support at lower levels and its entirely possible that we see a drop to 11300-11150 levels pretty quickly ( I know it doesn't sound possible at this stage). We are saying even if market scenario is bullish it can see lower levels of 11300 11150, however if the entire rise is just a corrective rise ( which we strongly believe it is) then we can see even lower levels.
However keep in mind there may be 100 things indicating that markets can correct from here , there is one key indicator ( price) which is not giving any weakness sign whatsoever hence trend for now remains up. But markets can surprise anytime so one must be prepared. For now we will continue with our cautious tone. Agreed we have been cautious since quite a while now but we also mentioned that markets can continue to stay overbought, euphoric and keep trading in 'top area' for extended period of time.As long as price movement do not confirm the reversal, it will be premature to say if the current uptrend is over. Having said this, the fall which follows after such movements can be pretty strong.so if one is long then he should exit once Nifty break below 11575 ( Fridays low) and wait for fresh entry point.
Happy Trading!
Market update: Nifty opened strong (once again) and kept trading above 11700 entire day however late bout of selling pushed it below 11650 and it closed at 11670, up 45 points.
Sensex today made an all time high and for a moment around 230PM it seemed even Nifty will follow suit but it missed it by 10 odd points. Markets today posted an shooting star candle on daily chart which is followed by a hanging man pattern (which it had posted on Friday). This again is a possible topping pattern which signify that probably bulls are losing steam and bears can take over however this is not the only time market has posted a topping pattern. Last few days market has been consistently indicating ( one way or other) that it may correct from these levels but on price chart there is absolutely no weakness whatsoever and markets continue to climb higher. So does it means markets will continue to go up like this and keep conquering higher levels? answer is absolutely no.
Markets may have posted a new high today (sensex) but overall the rise is too slow hence it will qualify as a corrective move only and the fact that we have a new high on sensex doesn't change the bigger picture.
In our previous post we had mentioned that recent move ( from lows of 10600) is wave C of ( ABC) and which is in its last leg (wave 5) & the wave 5 has measured exactly as wave 1 (both in terms of price and time). Today wave 5 has become bigger than wave 1 but that was always possible ( wave 5 ending around wave 1 was just a possibility and not a given). So technically we are still in wave 5 and once it ends we are looking for a deeper correction. Entire move from 10600 to 11740 should be corrected by atleast 38% to 50% which means 11150-11300). Now there are many who believes that market are in a pre election rally and will remain stronger till the time result comes out. It may be true but we continue to believe that markets can surprise with a sharp move down before that happens. Market has good support at lower levels and its entirely possible that we see a drop to 11300-11150 levels pretty quickly ( I know it doesn't sound possible at this stage). We are saying even if market scenario is bullish it can see lower levels of 11300 11150, however if the entire rise is just a corrective rise ( which we strongly believe it is) then we can see even lower levels.
However keep in mind there may be 100 things indicating that markets can correct from here , there is one key indicator ( price) which is not giving any weakness sign whatsoever hence trend for now remains up. But markets can surprise anytime so one must be prepared. For now we will continue with our cautious tone. Agreed we have been cautious since quite a while now but we also mentioned that markets can continue to stay overbought, euphoric and keep trading in 'top area' for extended period of time.As long as price movement do not confirm the reversal, it will be premature to say if the current uptrend is over. Having said this, the fall which follows after such movements can be pretty strong.so if one is long then he should exit once Nifty break below 11575 ( Fridays low) and wait for fresh entry point.
Happy Trading!
No comments:
Post a Comment