Medium Term Trend: ↓Down (Changes to up above 9800)
Smart Comeback: Yesterday nifty had raised some doubts by falling below 9100 levels but most of the losses were smartly covered today by Nifty and it closed around 9200 levels with a gain of 200+ points.
Yesterday we listed out 2 positives ( higher lows + positive divergence) and 1 negative (island reversal) and had mentioned "For a bullish scenario to play out from here, the lows around 8850 should hold and nifty should move back above 9100 level".
Smart Comeback: Yesterday nifty had raised some doubts by falling below 9100 levels but most of the losses were smartly covered today by Nifty and it closed around 9200 levels with a gain of 200+ points.
Yesterday we listed out 2 positives ( higher lows + positive divergence) and 1 negative (island reversal) and had mentioned "For a bullish scenario to play out from here, the lows around 8850 should hold and nifty should move back above 9100 level".
That's how market played out today, previous swing low was protected (infact yesterday’s day low was also not breached) and markets also bounced back above 9100 levels. As soon as 9100 was touched the bearish 'island reversal' which got created yesterday was filled and was a good signal to enter fresh long positions. Markets further advanced towards 9200 levels and many momentum indicators (which were beginning to turn negative or had turned negative yesterday) also turned positive towards the close.
Now going forward the next resistance is around 9320 levels and if markets can give weekly close above 9320 levels (still 2 trading sessions remaining) then that would give another strong signals that markets are probably ready to test 9500-9700 levels.
From trading perspective we continue to advise against going short but look out for opportunities to enter long only even if that means taking occasional hit and exiting & then re-entering (we did infact enter long positions around 9100 levels today which can be held with a SL of around 8950 now)
So will keep it short today, Reliance was the hero today & markets have made a strong comeback. Overall patterns continue to be that of higher highs and higher lows (which is a bullish sign).Now we need to see if it manages to conquer 9320 levels (closing basis) if that happens further gains can be expected and markets can head towards 9500+ levels.
Happy Trading
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