Medium Term Trend: ↓ Down (Up above 12103)
Market Bounces: Nifty opened around 11550 levels and dropped to 11520 levels immediately after opening however it kept inching up through out the day and closed near the high point of the day @ 11583 levels up 85 points.
We had mentioned in previous post that Nifty need to take out 11610-640 levels for the resumption of uptrend and if market sustains below 11500-525 levels then it can further slip to 11400 levels. Markets did neither, though it had closed at 11500 yesterday, today there was no followup selling below 11500 infact Nifty opened strong and bounced back from 11525 levels which tells us that 11500 level continue to remain important for now.
There is no doubt that market is in a downtrend and the way it has fallen from 11900 levels is indeed looking like a fresh down trend. However there are few things which are suggesting that 11500 is going to be a critical level to watch out for (and there are more than one possibility indicating the same)
Another important thing to note is that Nifty lost a huge 10 lac shares in OI today, Now losing OI on a day when markets have given a strong rally is indicative of short covering, so there is a high chance that todays rally was just because of short coverings. However the impact of fall in OI is that markets have once again become very light ( 1.75 crore). We have seen repeatedly in past that whenever markets are light they fail to move down for an extended period of time.
Overall, market remains in a downtrend and a sustained move below 11500-480 levels could invite further selling and Nifty is likely to drop to 11350-400 levels on the other hand strength above 11610 levels could probably extend the bounce we saw today, so trade accordingly.
Happy Trading!!
Market Bounces: Nifty opened around 11550 levels and dropped to 11520 levels immediately after opening however it kept inching up through out the day and closed near the high point of the day @ 11583 levels up 85 points.
We had mentioned in previous post that Nifty need to take out 11610-640 levels for the resumption of uptrend and if market sustains below 11500-525 levels then it can further slip to 11400 levels. Markets did neither, though it had closed at 11500 yesterday, today there was no followup selling below 11500 infact Nifty opened strong and bounced back from 11525 levels which tells us that 11500 level continue to remain important for now.
There is no doubt that market is in a downtrend and the way it has fallen from 11900 levels is indeed looking like a fresh down trend. However there are few things which are suggesting that 11500 is going to be a critical level to watch out for (and there are more than one possibility indicating the same)
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| Nifty daily chart |
- 1148-500 is exactly touching the channel bottom. This channel supported markets at 10600 and then at 11100 & now the same stands at 11500
- Gap area @ 11400-11691 still stands. Though Nifty has entered the gap area, it has not managed to fill it fully. So for now it will be considered that markets are trading in support zone
- 11480 is also the 61.8% retracement level of entire rise from 11100 to 12103
Another important thing to note is that Nifty lost a huge 10 lac shares in OI today, Now losing OI on a day when markets have given a strong rally is indicative of short covering, so there is a high chance that todays rally was just because of short coverings. However the impact of fall in OI is that markets have once again become very light ( 1.75 crore). We have seen repeatedly in past that whenever markets are light they fail to move down for an extended period of time.
Overall, market remains in a downtrend and a sustained move below 11500-480 levels could invite further selling and Nifty is likely to drop to 11350-400 levels on the other hand strength above 11610 levels could probably extend the bounce we saw today, so trade accordingly.
Happy Trading!!
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