Medium Term Trend: ↓ Down (Changes to Up above 11075)
Black Monday: Nifty opened with a gapdown at 10900 levels however unlike Friday, failed to find any support and broke below 10800. It closed with a massive loss of 200+ points @ 10797.
Fall in GDP and IIP weighed heavily on the markets and it crashed below 10800. it even broke the 10850 which brought further selling and weakness towards close and Nifty touched a low of 10772 before closing at 10800. However thing to note is that the fall has come on account of bad news and mostly the news driven rally or fall don't last for long.
Technically though we have fallen below 10850 we need to see if market is sustaining below these levels or attempt to bounce back. In short term we may see a bit of more weakness but our view doesn't change yet. We continue to believe that markets are in process of finding a bottom around these levels and these choppy moves and increased volatility is testimony of that. Now markets can go and fall a little bit more but till now there is nothing which is suggesting a broad fall from these levels. Of course sentiment driven fall or choppy moves can continue for some more time but for medium term perspective there is a probability of market making bottom around these levels.
The latest rally from 10650 to 11150 had taken just 3 days , now the fall from 11150 has taken 4 days already and it has still not able to retrace 100% of the previous rally. Also if you notice , the last 4 days fall from 11150 is clearly in a ABC corrective pattern and wherein ( after todays fall) the C leg has matched A leg. We need to observe if market tries to hold on to todays low and move above 10850 levels.
Another thing to note is that medium term pivot level has further moved down to 11075 levels (from 11220 earlier). In case market goes on to break above 11075 levels then hopefully that will pave the way for a fresh upmove in Nifty.
In Nutshell, there could be some more volatility and pain in coming days but overall it should be a part of the bottoming out process and once its done, we should be seeing an sustained move on the upside. Keep an eye on 11075-11100 levels, crossing over these levels would be the first sign of a fresh bull move.
Happy Trading
Black Monday: Nifty opened with a gapdown at 10900 levels however unlike Friday, failed to find any support and broke below 10800. It closed with a massive loss of 200+ points @ 10797.
Fall in GDP and IIP weighed heavily on the markets and it crashed below 10800. it even broke the 10850 which brought further selling and weakness towards close and Nifty touched a low of 10772 before closing at 10800. However thing to note is that the fall has come on account of bad news and mostly the news driven rally or fall don't last for long.
Technically though we have fallen below 10850 we need to see if market is sustaining below these levels or attempt to bounce back. In short term we may see a bit of more weakness but our view doesn't change yet. We continue to believe that markets are in process of finding a bottom around these levels and these choppy moves and increased volatility is testimony of that. Now markets can go and fall a little bit more but till now there is nothing which is suggesting a broad fall from these levels. Of course sentiment driven fall or choppy moves can continue for some more time but for medium term perspective there is a probability of market making bottom around these levels.
The latest rally from 10650 to 11150 had taken just 3 days , now the fall from 11150 has taken 4 days already and it has still not able to retrace 100% of the previous rally. Also if you notice , the last 4 days fall from 11150 is clearly in a ABC corrective pattern and wherein ( after todays fall) the C leg has matched A leg. We need to observe if market tries to hold on to todays low and move above 10850 levels.
Another thing to note is that medium term pivot level has further moved down to 11075 levels (from 11220 earlier). In case market goes on to break above 11075 levels then hopefully that will pave the way for a fresh upmove in Nifty.
In Nutshell, there could be some more volatility and pain in coming days but overall it should be a part of the bottoming out process and once its done, we should be seeing an sustained move on the upside. Keep an eye on 11075-11100 levels, crossing over these levels would be the first sign of a fresh bull move.
Happy Trading
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