Medium Term Trend: ↓Down (Changes to up above 12250)
Weakness Continues: Nifty o
In last update we had clearly mentioned that the way Market has fallen, and the way charts are shaping up its clear that the near term trend of the market has shifted to down and we changed the medium term indicator to 'Down' even when the reversal point of 11750-11800 was not breached. If anyone was in doubt about it on Monday ( many traders were thinking of it as a one day fall and expecting mkt to bounce back again after one bad day) then its been put to rest now. Nifty has posted 2 more consecutive losses and shown beyond a doubt that its in strong Bear grip.
Monday fall was also significant since it witnessed an 'island reversal' pattern ( explained in previous post). Now today again we got to see another 'island reversal' pattern. After Budget day's huge fall, Nifty had opened gap up at 11850 levels so there was a gap standng at 11750-11800 levels and today Nifty opened below it ( though it filled it intraday) but still the closing is much below it so it can have further bearish implications.
Since Monday, the markets have turned oversold on short term charts hence we keep seeing small bounce backs (though only intraday) but nothing meaningful as of now. Going forward it will be interesting to see if Nifty hold the previous low (11600). Holding 11600 could give some consolation to the bulls but if Nifty goes and drop below 11600 then we will have lower low and lower high type of scenario set in charts and that never is a positive sign.
In Nutshell, when markets opened with a gap of 150+ points on Monday it became clear that trend has been changed and there was no reason to carry with long positions. Now Nifty has further fallen around 300 points from that gap down area. In near term the weakness is likely to continue and Nifty needs to grind , consolidate and spend some time at lower levels before it start moving its way up again. Any attempted V shaped recovery can meet same fate as the last one did. For now markets are down and one should be looking to sell at rise and hold on to the shorts. Nifty needs to move above 11850 levels before we start talking about bottoms.
Weakness Continues: Nifty o
In last update we had clearly mentioned that the way Market has fallen, and the way charts are shaping up its clear that the near term trend of the market has shifted to down and we changed the medium term indicator to 'Down' even when the reversal point of 11750-11800 was not breached. If anyone was in doubt about it on Monday ( many traders were thinking of it as a one day fall and expecting mkt to bounce back again after one bad day) then its been put to rest now. Nifty has posted 2 more consecutive losses and shown beyond a doubt that its in strong Bear grip.
Monday fall was also significant since it witnessed an 'island reversal' pattern ( explained in previous post). Now today again we got to see another 'island reversal' pattern. After Budget day's huge fall, Nifty had opened gap up at 11850 levels so there was a gap standng at 11750-11800 levels and today Nifty opened below it ( though it filled it intraday) but still the closing is much below it so it can have further bearish implications.
Since Monday, the markets have turned oversold on short term charts hence we keep seeing small bounce backs (though only intraday) but nothing meaningful as of now. Going forward it will be interesting to see if Nifty hold the previous low (11600). Holding 11600 could give some consolation to the bulls but if Nifty goes and drop below 11600 then we will have lower low and lower high type of scenario set in charts and that never is a positive sign.
In Nutshell, when markets opened with a gap of 150+ points on Monday it became clear that trend has been changed and there was no reason to carry with long positions. Now Nifty has further fallen around 300 points from that gap down area. In near term the weakness is likely to continue and Nifty needs to grind , consolidate and spend some time at lower levels before it start moving its way up again. Any attempted V shaped recovery can meet same fate as the last one did. For now markets are down and one should be looking to sell at rise and hold on to the shorts. Nifty needs to move above 11850 levels before we start talking about bottoms.
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