Medium Term Trend: ↓ Down (Changes to Up above 11620)
Nifty Sees a Pullback: Nifty opened again in negative territory around 11050 and went on to touch 11K levels. However strong buying around 11K lifted the markets to 11140 levels and Nifty closed at 11120 levels. Up 35 points.
Yesterday market created a panic like situation where it fell almost 200 points from days high and the panic was further accentuated today with a drop of 80 odd points in the morning session. However we had clearly mentioned yesterday that inspite of such a big fall we continue to believe that long term trend remains up as long as 11K-11050 range holds. We had also mentioned that there is a likelihood that this fall has come just to create panic in the markets and to force weak hands out.
Today market touched exact low of 11K and moved up around 140 points and todays move justify our theory to some extent. However Nifty needs to exhibit a lot more strength and follow up buying from here onwards to reenter bullish zone. We were bearish on Nifty as soon as 11750 broke & remained bearish till the zone of 11300-11250. We had been expecting Nifty to offer strong support in 11200-11250 zone with a final support at 11K-11050 level. Nifty might have slipped below 11200 zone but its still managing to hold on to its important supports and as a result the long term trend still remains up and like we mentioned yesterday as long as markets are not breaking long term trend and trading in the long term support zone, the only viable trend is on the long side. Now its entirely possible that in coming sessions the long term support is breached as well but usually whenever long support is broken , its broken in a vicious manner and not like this ( its been 40 days since market hit a high of 12103) the current fall is too slow.
In summary we continue to hold on to our view that a bullish move is possible from current levels and risky/smart traders should utilize each fall (as long 11K holds).to go long in small qty. There are many factors indicating that markets could form an all important low at current levels from a long term perspective and if certain things play out like we have been expecting then markets can give a sharp upmove.
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