Medium Term Trend: ↑ UP (Changes to down below 11770)
Stumbles but recovers: Nifty opened again with a huge gap down (thanks to geopolitical tensions) but immediately attracted buying at lower levels which pushed nifty back above 12K levels. It closed flattish @ 12025 ( down 30 odd points).In last post we had mentioned that overall trend of the market remains strong and 11975-12K should offer good support to the markets and even if 11975 is breached markets are likely to found support at 11880 levels. Today markets opened below 11975 levels but didn't hang there for long and immediately moved up and the closing price has come comfortably above the 111975-12K range.
Tomorrow is going to be crucial, since last 2 days markets are exhibiting nervousness at higher levels (which is understandable and natural). As long as 11770 holds ( which is still more than 200 points away) market trend remain bullish and positive. Any fall should not be construed as a sign of weakness and should be taken as a part of consolidation process. Usually whenever markets fall due to some event ( especially after the event) then it recovers once ( even if it falls later). Nifty is attracting buying at lower levels and if Geo political tensions subsides ( and it should after today's event) and doesn't escalates any further, then we can expect a sharp swing on the upside. Many short positions are probably created today/yesterday which could support Nifty on the way up.
In Nutshell, we remain bullish on markets inspite of last few days fall and geopolitical tensions and once situation normalizes, We can expect market to resume it uptrend once again. However volatility is likely to be high so if you trade, don't leverage and trade with qty you are comfortable with. On technical side, markets exhibited strong positive divergence as soon as it opened in -ve today so 11930-11950 was a good level to enter long positions (with a very favourable risk reward ratio).
Happy Trading!!
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