Medium Term Trend: ↑UP (down below 11550)
Day of relief: Nifty opened flat and immediately started moving down, it broke below 11800 levels and made a low of 11770 before giving some pullback. It closed at 11870 levels up 25 points.
We had mentioned yesterday that if Nifty breaks below 11780-820 then weakness is likely to continue for now. Though Nifty broke below 11800 levels it was momentarily and bounced back immediately. So now that Nifty has taken support at 11800 and bounced back, can we assume that bottom is in place and correction we are seeing since last 2-3 days is over and Nifty is ready to bounce back to 12k levels again? Well it is possible but the bounce we have seen from 11800 levels is looking more like a consolidation & doesn't look very strong (till now). There is a possibility that this just a temp pause before Nifty start moving down &11800 is tested again in next week. For bullish scenario to materialize Nifty should conquer 11930-950 levels soon (which ideally should have been done today). Unless market makes a strong close above 11930-950 levels the chances of market slipping down again remains.
Nifty open OI stands at 1.85L shares which is on lighter side ( but not as light as it was when markets had touched 11100 before elections) and today it lost 8 lac shares. Losing OI on a day when markets have bounced back is probably an indication of some bit of short covering by traders around 11800 levels. Also looking at weekly charts of Nifty, this is the third week in a row where Nifty has posted a Doji type of candle with long upper body ( which is indicating continuous supply near 12k levels). Also the current week candle has higher high and lower low than previous week candle (like a bearish engulfing pattern) and the weekly close is lower than last week too.
There is no significant divergence with RSI on hourly charts and RSI seems to be moving in line with Nifty.Global markets have consistently making big strides since last 2-3 days with DJIA recovering almost 4% from its recent low. Need to see if it can manage the same momentum in next week too.
In summary, market overall trend remains up however until Nifty start making strong close above 11920-950 levels. There is a possibility of some more weakness in near term. However if weakness continues and nifty goes on to break 11500 levels then overall view will change as well.
Happy Trading!
Day of relief: Nifty opened flat and immediately started moving down, it broke below 11800 levels and made a low of 11770 before giving some pullback. It closed at 11870 levels up 25 points.
We had mentioned yesterday that if Nifty breaks below 11780-820 then weakness is likely to continue for now. Though Nifty broke below 11800 levels it was momentarily and bounced back immediately. So now that Nifty has taken support at 11800 and bounced back, can we assume that bottom is in place and correction we are seeing since last 2-3 days is over and Nifty is ready to bounce back to 12k levels again? Well it is possible but the bounce we have seen from 11800 levels is looking more like a consolidation & doesn't look very strong (till now). There is a possibility that this just a temp pause before Nifty start moving down &11800 is tested again in next week. For bullish scenario to materialize Nifty should conquer 11930-950 levels soon (which ideally should have been done today). Unless market makes a strong close above 11930-950 levels the chances of market slipping down again remains.
Nifty open OI stands at 1.85L shares which is on lighter side ( but not as light as it was when markets had touched 11100 before elections) and today it lost 8 lac shares. Losing OI on a day when markets have bounced back is probably an indication of some bit of short covering by traders around 11800 levels. Also looking at weekly charts of Nifty, this is the third week in a row where Nifty has posted a Doji type of candle with long upper body ( which is indicating continuous supply near 12k levels). Also the current week candle has higher high and lower low than previous week candle (like a bearish engulfing pattern) and the weekly close is lower than last week too.
There is no significant divergence with RSI on hourly charts and RSI seems to be moving in line with Nifty.Global markets have consistently making big strides since last 2-3 days with DJIA recovering almost 4% from its recent low. Need to see if it can manage the same momentum in next week too.
In summary, market overall trend remains up however until Nifty start making strong close above 11920-950 levels. There is a possibility of some more weakness in near term. However if weakness continues and nifty goes on to break 11500 levels then overall view will change as well.
Happy Trading!
No comments:
Post a Comment