Medium Term Trend: ↑ UP (Changes to down below 11550)
Building Strength: Nifty opened positive around 11945 levels and went on to touch 12K levels before some profit booking pulled it back slightly to 11960 levels. It closed at 11970 ( up 60 points).
In last update we had mentioned that " the way Nifty is trading , its likely that current correction is stretched a bit more but the overall trend remains on the upside and market could finish the correction anytime and at any level and start moving up".
However markets took support yesterday around 11850 and once again started moving up. When markets broke below 11850 it had given a clear positive divergences on the hourly chart which suggested that the end of this correction is probably near. That was a good enough indication to cover all the shorts ( thats exactly what we did). Markets indeed jumped from that levels and has given a followup buying today which is a strong indication that the correction is over and nifty is probably all set to touch higher level once again.
However markets took support yesterday around 11850 and once again started moving up. When markets broke below 11850 it had given a clear positive divergences on the hourly chart which suggested that the end of this correction is probably near. That was a good enough indication to cover all the shorts ( thats exactly what we did). Markets indeed jumped from that levels and has given a followup buying today which is a strong indication that the correction is over and nifty is probably all set to touch higher level once again.
Overall if we see, the open interest in NF is abysmally low @1.4 crores and as per our observations no major/serious correction is witnessed when OI in NF is low . Apart from that we also witnessed one strong positive divergences on hourly charts which suggested a reversal on the cards. All these things are suggesting that Nifty is likely to touch higher levels ( 12100-12200-12300).
In Nutshell, overall trend of Nifty was always up and now it seems that the correction which started from 12150 levels got over yesterday and Nifty has opened a fresh move on the upside which can go on to touch 12200-12300 (even higher levels). However if Nifty start moving down again and start trading below 11900 levels then it would raise serious question mark about the sustainability of this rally so one needs to be careful if Nifty breaks below 11900 levels.
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