Medium Term Trend: ↑ UP (Changes to down below 11050)
Volatility to the core : Nifty opened positive above 11300 and went on to touch 11360 before a sharp fall came and nifty dropped below 11200 levels however Markets recovered again and Nifty reclaimed 11300 levels to close at 11305 and gained 70 odd points.
Nifty has been moving in a very volatile move however the trend remains on the upside. Downmove or choppiness we are witnessing are not able to sustain and Nifty is slowly inching upwards. For now 11350 level is acting like a strong resistance but the way markets are trading there are chances this level could eventually be taken out. On the downside todays low at 11190 assumes a lot of significance. In case nifty start trading weak and drops below 11190 then the current correction can extend further by 150-250 points. On the upside, if 11350 is crossed then 11430-450 is the next resistance for Nifty and above that 11700 could be and should be tested once again.
We have been recommending buying on dips (and the strategy seems to be working for now) and strongly advising against going short as we believe we are in a very crucial uptrend. We might spend some more time around these levels and some more volatility can be seen but we believe its just a matter of time before Nifty start moving towards higher ( much higher) levels. We saw a sharp rally of 1000+ points from the lows of 10650 levels ( regular readers of this blog must be aware that we were continuously recommending going long at those levels) and we believe that theres a probability Nifty giving another big move on the similar lines pretty soon.
 |
| Nifty daily chart |
Since many are requesting to post an update on our medium term outlook let me just post an overall summary ( will also post an detailed update if time permits). We believe that markets completed a very important upmove or a bullish cycle at 11171 in Jan 2018. All the moves we saw afterwards ( 11171- 10K-11650-10k-11K-10600) were part of a 13 month long correction which might have finished as a 5 legged neutral triangle and after that market has opened another up leg/bullish cycle which finished its leg 1 at 12100 and leg 2 at recent low of 10650 ( leg 2 retraced almost 90% of the leg 1). Now theres a possibility that we are in leg 3 which could take Nifty to much higher levels.
Here we must mention that when E leg was in prgoress we were expecting it to fall below 9950 and create panic like situation in the markets however that didnt happen and E leg ended at a failure point ( which was higher than C leg). E leg ending at a failure point increases the possibility of markets starting a strong uptrend. However that doesnt mean that market will be moving in a straight line, we will continue to see choppy moves and sharp fall of 200-300 points very often ( just to scare the weak hands). So while its important to have a stop loss its equally important to have a strong conviction.
Happy Trading!
No comments:
Post a Comment