Medium Term Trend: ↓Down (Changes to up above 11095)
Bloodbath continues: Nifty opened (yet again) with a huge gapdow and kept on moving downwards. It hit a low of 10295 before moving back above 10400 levels.There was absolute carnage all around & it closed with a massive loss of 540 points.
Nifty is getting weaker day by day and though there were indicators that we could see some stability around 11K levels (and we had also said that as long as levels around 11K are held, there are chances that the fall is arrested around current levels). However another gapdown today made it clear that markets are not following any technical indicator as of now and this fall is turning into something which is not common or is of rare nature..
In last post we had shown nifty chart with RSI to point out that how RSI has come down to a level ( which has been generally seen only twice a year in last 5-6 years). Now today weekly RSI has gone below 30, which was last seen in 2018 (when nifty hit 9950) and before that in 2016 ( when nifty hit a bottom of 7k) and before that it was in 2012 ( when nifty was at 5K levels). Only time Weekly RSI for Nifty has fallen significantly below 30 was way back in 2008 ( 12 years back) that time RSI had dropped to 20 and Nifty had seen a low of 2K.
Now if this was a normal correction it should have stopped around 11K levels ( which it didnt) but even if its a rare correction or a rare fall ( which happens once in 2-3 years) then it likely to hold around the levels of 11200-11300 and not fall much beyond these levels.
Now lets consider the other scenario where this fall turns into 'extremely rare' (which happens once in 10-15 years like that of 2008), then weekly RSI can drop to 20 ( which means Nifty can go down as low as 9500).
Its upto market to decide what category of correction/fall it wants to achieve, depending on that either we fall another 1000 points towards 9500 ( going by current speed it can be achieved in 1-2 trading sessions) or complete it around todays low. There is no point predicting the next target cause when markets are in such mood generally no level is respected and no technicals are followed.
Having said this, would like to make one correction. In last post we had also mentioned about the possibility of exhaustion gap and had called the gap on friday , 4th gapdown in a row. looking at charts again it was only a 3rd gap down ( the second gap down around 10750 on 26th was filled intraday so doesn't qualify). Technically, todays gap was the fourth consecutive gape and generally the 4th consective gap is filled in subsequent trading sessions ( next 2-3) but the point is these days markets are not following 'general' rule. But still we need to observe and see if markets tries to fill this gap and move above 11800 levels in coming sesssions.If that happens then may be ( just may be) we can hope that bottom is done for time being.
Happy Trading!
Bloodbath continues: Nifty opened (yet again) with a huge gapdow and kept on moving downwards. It hit a low of 10295 before moving back above 10400 levels.There was absolute carnage all around & it closed with a massive loss of 540 points.
Nifty is getting weaker day by day and though there were indicators that we could see some stability around 11K levels (and we had also said that as long as levels around 11K are held, there are chances that the fall is arrested around current levels). However another gapdown today made it clear that markets are not following any technical indicator as of now and this fall is turning into something which is not common or is of rare nature..
In last post we had shown nifty chart with RSI to point out that how RSI has come down to a level ( which has been generally seen only twice a year in last 5-6 years). Now today weekly RSI has gone below 30, which was last seen in 2018 (when nifty hit 9950) and before that in 2016 ( when nifty hit a bottom of 7k) and before that it was in 2012 ( when nifty was at 5K levels). Only time Weekly RSI for Nifty has fallen significantly below 30 was way back in 2008 ( 12 years back) that time RSI had dropped to 20 and Nifty had seen a low of 2K.
Now if this was a normal correction it should have stopped around 11K levels ( which it didnt) but even if its a rare correction or a rare fall ( which happens once in 2-3 years) then it likely to hold around the levels of 11200-11300 and not fall much beyond these levels.
Now lets consider the other scenario where this fall turns into 'extremely rare' (which happens once in 10-15 years like that of 2008), then weekly RSI can drop to 20 ( which means Nifty can go down as low as 9500).
Its upto market to decide what category of correction/fall it wants to achieve, depending on that either we fall another 1000 points towards 9500 ( going by current speed it can be achieved in 1-2 trading sessions) or complete it around todays low. There is no point predicting the next target cause when markets are in such mood generally no level is respected and no technicals are followed.
Having said this, would like to make one correction. In last post we had also mentioned about the possibility of exhaustion gap and had called the gap on friday , 4th gapdown in a row. looking at charts again it was only a 3rd gap down ( the second gap down around 10750 on 26th was filled intraday so doesn't qualify). Technically, todays gap was the fourth consecutive gape and generally the 4th consective gap is filled in subsequent trading sessions ( next 2-3) but the point is these days markets are not following 'general' rule. But still we need to observe and see if markets tries to fill this gap and move above 11800 levels in coming sesssions.If that happens then may be ( just may be) we can hope that bottom is done for time being.
Happy Trading!
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