Medium Term Trend: ↓Down (Changes to up above 9800)
Back with a bang: Nifty opened with a smart gap up around 8400 and didn't look back, it kept on marching on & on and even crossed 8800 levels. Settled finally at 8792. Up by whopping 700 points.
In yesterdays post we had mentioned :-
"a move above 8300-8350 levels can push Nifty back towards 9000 levels if that is taken out (faster retracement of E leg of Extracting triangle as mentioned in the previous posts) then we are going straight towards 10K levels".
We further mentioned that:-
"the fall from 9100 to 8000 levels ( last few days) is appearing tired and slow. Move on the downside has to be sharp and quick, whenever we see slow falls, the chances are its just a correction and market will start moving up again once its done."
Nifty opened around 8400 and touched 8350 once and zoomed towards 8800 levels. We had also been mentioning about market forming a bullish 'extracting triangle' and 'falling wedge'. Friday market dropped to around 8100 levels which was near the breakout area of falling wedge( more about it can be read in the previous post here - Update for 31st.
Taking support/bouncing from 8100 level and crossing above 8400 level is a very bullish sign indeed. It is a first sign or confirmation that the fall from 9050 to 8100 levels was just a correcting move and that probably mkt is ready to change trend now, for a second sign/confirmation we need Nifty to move above 9050 levels in next 2-3 trading session. If that happens then we could say that 'extracting triangle' is probably done and is power could push Nifty really high ( like the bearish extracting triangle which formed around 12K area had pushed Nifty lower). For a final confirmation we would then be needing Nifty to cross above 9800 levels that would change the medium term trend to 'up'.
In case we do see Nifty moving above 9050 levels in next couple of trading sessions that all short term short positions should be exited as the next logical target is 9800-9900 for Nifty. As far as trading is concerned we added long around 8570 levels today and further recommend entering long positions in case Nifty manages to move up above 9050 in next few trading sessions.
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