Medium Term Trend: ↓Down (Changes to up above 10500)
Nifty has drifted towards Friday low of 8500 and has breached it marginally too. Weakness we are seeing in the markets is truly exceptional and market is just not stopping its downward march.
We have been mentioning that 8500-9K is the zone where Nifty can bottom out and even though we have closed slightly below it, our view has not changed. Volatility index has moved to 63% so 100-200 points here and there shouldnt matter much. A retest of Friday low was always a possibility so its not really surprising that markets have visited those lows again.
In last few posts we have mentioning how around 8500-9000 levels markets are more or less achieved correction which is in line with previous major fall seen in 2008 ( and 2000 and 1993). In 2008 Nifty had fallen from 6300 to around 2300 ( fall of 4k points). Now in 2020 Nifty top was around 12400 and at todays low of 8407 we have achieved a correction of 4K points. So even in absolute terms we have achieved correction with those of 2008 levels.
Now there are some who will point out that in 2008 we had corrected around 57% so its possible that we repeat that as well. But that is not the right way to look at it, let me point out how. In 2008 markets had moved quite a lot, nifty had moved from lows of 990 to 6300 ( almost 7 times) so it took markets a crash a 57% to bring back markets to the average of last 4 - 5 years. In other words market needed a crash of 57% to wipe out the gains of last 4 years. Now, in 2020, mkts have achieved that with a 30% fall. Today we are sitting at same level where were sitting 4 years back. Its all a matter of wiping out the excesses of last few years ( and not about absolute %age fall).
Having said this we need to observe and see if market is taking a support at these levels. Important support levels shouldnt be tested again and again and markets shouldnt hang around these levels for long. We have tested these levels twice now so need to observe if markets tries to make a comback which is definitely due and likely. In Our opinion one should continue to buy good quality stock with a final stop at 8k levels.
Happy Trading!
To join our algorithm based buy/sell whatsapp service, pls click below link or whatsapp @ 9319321906
Nifty Buy/Sell Algorithm
Nifty has drifted towards Friday low of 8500 and has breached it marginally too. Weakness we are seeing in the markets is truly exceptional and market is just not stopping its downward march.
We have been mentioning that 8500-9K is the zone where Nifty can bottom out and even though we have closed slightly below it, our view has not changed. Volatility index has moved to 63% so 100-200 points here and there shouldnt matter much. A retest of Friday low was always a possibility so its not really surprising that markets have visited those lows again.
In last few posts we have mentioning how around 8500-9000 levels markets are more or less achieved correction which is in line with previous major fall seen in 2008 ( and 2000 and 1993). In 2008 Nifty had fallen from 6300 to around 2300 ( fall of 4k points). Now in 2020 Nifty top was around 12400 and at todays low of 8407 we have achieved a correction of 4K points. So even in absolute terms we have achieved correction with those of 2008 levels.
Now there are some who will point out that in 2008 we had corrected around 57% so its possible that we repeat that as well. But that is not the right way to look at it, let me point out how. In 2008 markets had moved quite a lot, nifty had moved from lows of 990 to 6300 ( almost 7 times) so it took markets a crash a 57% to bring back markets to the average of last 4 - 5 years. In other words market needed a crash of 57% to wipe out the gains of last 4 years. Now, in 2020, mkts have achieved that with a 30% fall. Today we are sitting at same level where were sitting 4 years back. Its all a matter of wiping out the excesses of last few years ( and not about absolute %age fall).
Having said this we need to observe and see if market is taking a support at these levels. Important support levels shouldnt be tested again and again and markets shouldnt hang around these levels for long. We have tested these levels twice now so need to observe if markets tries to make a comback which is definitely due and likely. In Our opinion one should continue to buy good quality stock with a final stop at 8k levels.
Happy Trading!
To join our algorithm based buy/sell whatsapp service, pls click below link or whatsapp @ 9319321906
Nifty Buy/Sell Algorithm
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