Near Term Trend:↔(Neutral/Upswing maturing)
Market update: Nifty opened at 11700 but quickly dropped to 11650 levels within seconds after opening and even dropped to 11550 levels intraday. It finally closed at 11600 down 60 points.
In our previous post we had mentioned "if Nifty fails to cross 11710-11720 levels then 11550 levels can be tested again and if that happens it will be a lower top lower high kind of a scenario which can invite further selling". That's exactly how the markets played out today, it failed to cross 11700 levels and dropped below 11560 levels. Now on intraday charts we have a lower top lower high type of a pattern in place and Bulls now need a very strong push immediately else there is a chance that bears will get active (after a long time).
Overall trend still remains neutral ( we have been marking the trend as ' neutral' since last 4-5 days and clearly Nifty indeed can be seen trading flattish or sideways since last 4-5 days). For any bullish scenario to play out, bulls need Nifty to cross above 11700 levels if that happens trend will again change back to 'up' however we need further (infact lot more) weakness to change the trend to 'down'. Its entirely possible that this sideway movement is just a temp correction post which Nifty will resume its uptrend or at the same time its also possible that for now an intermediate top has been hit (at 11760). VIX also shot up 10% and closed above 20 which might indicate that markets are probably bracing themselves for high volatility in near term.
There are plenty of technical indicators which continue to suggest a likelihood ( just a possibility mind you) that an intermediate/short term top has been put in place already. We have been mentioning these indicators in previous posts but to sum up:
Now apart from these, there are plenty of other things which are indicating a possible top but the key indicator which is 'price' is still in bullish mode and as long as Nifty is strong on price charts it can continue to soar higher and higher ( all other things can be ignored). But that doesn't mean that one should get complacent or overexcited after seeing the 1000 point rally. This week is very important and probably will set a clear trend for times to come.
Happy Trading!
Market update: Nifty opened at 11700 but quickly dropped to 11650 levels within seconds after opening and even dropped to 11550 levels intraday. It finally closed at 11600 down 60 points.
In our previous post we had mentioned "if Nifty fails to cross 11710-11720 levels then 11550 levels can be tested again and if that happens it will be a lower top lower high kind of a scenario which can invite further selling". That's exactly how the markets played out today, it failed to cross 11700 levels and dropped below 11560 levels. Now on intraday charts we have a lower top lower high type of a pattern in place and Bulls now need a very strong push immediately else there is a chance that bears will get active (after a long time).
Overall trend still remains neutral ( we have been marking the trend as ' neutral' since last 4-5 days and clearly Nifty indeed can be seen trading flattish or sideways since last 4-5 days). For any bullish scenario to play out, bulls need Nifty to cross above 11700 levels if that happens trend will again change back to 'up' however we need further (infact lot more) weakness to change the trend to 'down'. Its entirely possible that this sideway movement is just a temp correction post which Nifty will resume its uptrend or at the same time its also possible that for now an intermediate top has been hit (at 11760). VIX also shot up 10% and closed above 20 which might indicate that markets are probably bracing themselves for high volatility in near term.
There are plenty of technical indicators which continue to suggest a likelihood ( just a possibility mind you) that an intermediate/short term top has been put in place already. We have been mentioning these indicators in previous posts but to sum up:
- Entire pull back from 10K levels has consumed around 280% of time of previous fall ( max time allowed as per neo-wave is around 300%)
- Number of trading session from lows of 10k are coming to be 108 (which matches exactly with the previous cycle ( 9950 to 11750)
- On weekly charts, markets posted a spinning top last week
- Since the uptrend started from 10k nifty has posted 4 gaps (daily chart) and the 4th got filled last Wednesday and turned into an exhaustion gap
- PE ratio touched 29 ( which is highest for last 10 year or so)
- Last 9-10 days rally (from 11320 till 11760) is carrying a very strong negative divergence
Now apart from these, there are plenty of other things which are indicating a possible top but the key indicator which is 'price' is still in bullish mode and as long as Nifty is strong on price charts it can continue to soar higher and higher ( all other things can be ignored). But that doesn't mean that one should get complacent or overexcited after seeing the 1000 point rally. This week is very important and probably will set a clear trend for times to come.
Happy Trading!
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