Medium Term Trend: ↑UP (down below 11550)
Correction check: Nifty today went on to hit a new lifetime high at 11883 but succumbed to profit booking soon after and dropped to 11700 levels. It closed at 11709 down 125 points.
After a massive rally yesterday, it seems profit booking kicked in today which is evident from fall in Nifty OI ( nifty OI fell by 4lac shares today). Nifty was also overbought on the short term charts which could again have triggered this bout of selling but thanks to todays fall, markets are no longer appearing overbought.
Nifty had a good support at 11750-760 levels which was taken out today but the real support zone is 11650-11700 levels and below that 11575-11600. Volatility continue to remain high hence all support levels and SLs are widespread too.
One key thing to note is that when markets had fallen from 11750 to 11108 levels earlier this month, it had made a gapdown on daily chart. Nifty had closed at 11709 on 5th May and on 6th May it opened with a gap down around 11600, this gap stands at 11640-11700 levels. Bearish implication of this gap-down pushed markets all the way down to 11100 levels.Now there are many who are asking if the rally we saw yesterday was just a false move and Nifty will again start moving down. Well anything is possible but as per our analysis if yesterdays move was just a false move then Nifty shouldn't have crossed 11700 levels and should have closed below 11640 levels (no run away gap area especially those which triggered the move should be closed this easily).
Nifty had opened at 11700 yesterday and immediately dropped to 11600, if it had traded in that zone for whole day ( 11600-700) and closed below 11700 then this scenario (false move) was possible however it immediately went back above 11700 and covered the gap on closing basis and inspite of a sharp fall today the closing is again above the gap area. Now Nifty might again fall below it, not denying, but as long as the 11600-575 is not broken, the bullish trend started by Nifty in last 2-3 days , still stays intact.
Other thing is that there is lot of call writing happening at 12000 and 12500 so in immediate term Nifty might find it difficult to cross and sustain above these levels but these are election time so anythings possible.
Happy Trading
Correction check: Nifty today went on to hit a new lifetime high at 11883 but succumbed to profit booking soon after and dropped to 11700 levels. It closed at 11709 down 125 points.
After a massive rally yesterday, it seems profit booking kicked in today which is evident from fall in Nifty OI ( nifty OI fell by 4lac shares today). Nifty was also overbought on the short term charts which could again have triggered this bout of selling but thanks to todays fall, markets are no longer appearing overbought.
Nifty had a good support at 11750-760 levels which was taken out today but the real support zone is 11650-11700 levels and below that 11575-11600. Volatility continue to remain high hence all support levels and SLs are widespread too.
One key thing to note is that when markets had fallen from 11750 to 11108 levels earlier this month, it had made a gapdown on daily chart. Nifty had closed at 11709 on 5th May and on 6th May it opened with a gap down around 11600, this gap stands at 11640-11700 levels. Bearish implication of this gap-down pushed markets all the way down to 11100 levels.Now there are many who are asking if the rally we saw yesterday was just a false move and Nifty will again start moving down. Well anything is possible but as per our analysis if yesterdays move was just a false move then Nifty shouldn't have crossed 11700 levels and should have closed below 11640 levels (no run away gap area especially those which triggered the move should be closed this easily).
Nifty had opened at 11700 yesterday and immediately dropped to 11600, if it had traded in that zone for whole day ( 11600-700) and closed below 11700 then this scenario (false move) was possible however it immediately went back above 11700 and covered the gap on closing basis and inspite of a sharp fall today the closing is again above the gap area. Now Nifty might again fall below it, not denying, but as long as the 11600-575 is not broken, the bullish trend started by Nifty in last 2-3 days , still stays intact.
Other thing is that there is lot of call writing happening at 12000 and 12500 so in immediate term Nifty might find it difficult to cross and sustain above these levels but these are election time so anythings possible.
Happy Trading
No comments:
Post a Comment