Medium Term Trend: ↓Down ( up above 11720)
Market update: Nifty had another bad session (6th in row) where it dropped more than 100 points. It touched a low of 11350 and closed at 11360. Down 130 odd points
We had mentioned yesterday that Nifty needed to hold 11446-485 levels to maintain the trend on the upside, however today its broken conclusively hence the trend is changed to down. Previously Trend was marked as up when Nifty had crossed 11K levels in first week of March. Trend has now changed (to down) after almost 2 months now.
Even though the market trend is down now , Nifty is looking oversold on hourly charts ( RSI touched 20 intraday) hence some amount of consolidation or pull backs can be expected before nifty start moving down again.
If we assume that the top is now done at 11860 levels then there are few critical levels to watch out for. First support is there at 11350-11375 which is also nearing todays low and is 38.2% retracement level of the previous move if 11350-75 is also taken out then we are heading straight to 11200-11220 levels. There is a possibility that Nifty has broken a H&S pattern ( neckline at 11550) and the bearish implication of this pattern can take Nifty to 11350-11200 levels as well ( which matches with the above levels).
For any bullish scenario to emerge, Nifty Needs to conquer the huge gap down that was created 3 days back (11640-11700) only a close above 11700 levels can and will change the trend back to 'up'.
In a nutshell, though trend is down , one should not be in a hurry to short at current levels because of oversold conditions (Also today is the 6th consecutive day of fall) wait for a pullback first and sell only when pull back ends and markets start moving down again.
VIX continues to rise and is sitting at 26 (which is the highest level of last 3 years) hence huge swings can always be expected.
Happy Trading!
Market update: Nifty had another bad session (6th in row) where it dropped more than 100 points. It touched a low of 11350 and closed at 11360. Down 130 odd points
We had mentioned yesterday that Nifty needed to hold 11446-485 levels to maintain the trend on the upside, however today its broken conclusively hence the trend is changed to down. Previously Trend was marked as up when Nifty had crossed 11K levels in first week of March. Trend has now changed (to down) after almost 2 months now.
Even though the market trend is down now , Nifty is looking oversold on hourly charts ( RSI touched 20 intraday) hence some amount of consolidation or pull backs can be expected before nifty start moving down again.
If we assume that the top is now done at 11860 levels then there are few critical levels to watch out for. First support is there at 11350-11375 which is also nearing todays low and is 38.2% retracement level of the previous move if 11350-75 is also taken out then we are heading straight to 11200-11220 levels. There is a possibility that Nifty has broken a H&S pattern ( neckline at 11550) and the bearish implication of this pattern can take Nifty to 11350-11200 levels as well ( which matches with the above levels).
For any bullish scenario to emerge, Nifty Needs to conquer the huge gap down that was created 3 days back (11640-11700) only a close above 11700 levels can and will change the trend back to 'up'.
In a nutshell, though trend is down , one should not be in a hurry to short at current levels because of oversold conditions (Also today is the 6th consecutive day of fall) wait for a pullback first and sell only when pull back ends and markets start moving down again.
VIX continues to rise and is sitting at 26 (which is the highest level of last 3 years) hence huge swings can always be expected.
Happy Trading!
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