Medium Term Trend: ↓Down (Changes to up above 9800)
Pull back from 9000 levels: Nifty dropped for almost 200 points in the morning session to 9k levels but pulled smartly by the end to just close around 9200 levels down 40 odd points.
In previous post we had mentioned "its possible that we may see some more sideways trading/consolidation/weakness before we start reclaiming 9500+ levels".
We had further mentioned that "Nifty's inability to take out 9300-9400 levels or to fill the bearish 'island reversal gap' has raised a possibility which suggest that the fall which started with a gapdown from 9850 levels is not yet complete.
Today Nifty dropped further towards 9k levels which justifies our stand. We had also mentioned that probably C leg of correction is pending but still we are not seeing too much weakness below 9k levels.
The sharp bounce we have seen today could be an indication that the correction we were expecting (C leg) already got over today. However we need to see some follow up buying above todays high. Nifty has formed a 'hammer' pattern on the daily chart today which could be a positive/bottoming out sign too. Many indicators on short term charts are also beginning to get into positive zone now. You may accuse us of changing our views frequently, but when markets change, we have to change as well. Markets can change in hours/days/week or month no one can predict that. Yesterday we were expecting more correction and we got that today and now the pull back is indicating more upside movement, provided we are able to sustain above 9250 or todays high ( fresh long positions can be entered in such case).
So all in all todays pull back (inspite of a negative close) is promising indeed and if Nifty can manage to cross/move and sustain above 9250 levels tomorrow then there is a chance that the corrective leg which started from 9800 levels got over today and markets bottomed out (for time being) at 9050 levels. It could also mean that a fresh leg on the upside is about to start. On the downside though, if we see weakness below 9100 levels then 9k is likely to be tested again but like I said yesterday, we are not expecting much weakness below 9k levels for now. Surely we can fall a bit more but its not likely to sustain ( this view ofcourse can change as we move ahead).
Nifty Buy/Sell Algorithm
Pull back from 9000 levels: Nifty dropped for almost 200 points in the morning session to 9k levels but pulled smartly by the end to just close around 9200 levels down 40 odd points.
In previous post we had mentioned "its possible that we may see some more sideways trading/consolidation/weakness before we start reclaiming 9500+ levels".
We had further mentioned that "Nifty's inability to take out 9300-9400 levels or to fill the bearish 'island reversal gap' has raised a possibility which suggest that the fall which started with a gapdown from 9850 levels is not yet complete.
Today Nifty dropped further towards 9k levels which justifies our stand. We had also mentioned that probably C leg of correction is pending but still we are not seeing too much weakness below 9k levels.
The sharp bounce we have seen today could be an indication that the correction we were expecting (C leg) already got over today. However we need to see some follow up buying above todays high. Nifty has formed a 'hammer' pattern on the daily chart today which could be a positive/bottoming out sign too. Many indicators on short term charts are also beginning to get into positive zone now. You may accuse us of changing our views frequently, but when markets change, we have to change as well. Markets can change in hours/days/week or month no one can predict that. Yesterday we were expecting more correction and we got that today and now the pull back is indicating more upside movement, provided we are able to sustain above 9250 or todays high ( fresh long positions can be entered in such case).
So all in all todays pull back (inspite of a negative close) is promising indeed and if Nifty can manage to cross/move and sustain above 9250 levels tomorrow then there is a chance that the corrective leg which started from 9800 levels got over today and markets bottomed out (for time being) at 9050 levels. It could also mean that a fresh leg on the upside is about to start. On the downside though, if we see weakness below 9100 levels then 9k is likely to be tested again but like I said yesterday, we are not expecting much weakness below 9k levels for now. Surely we can fall a bit more but its not likely to sustain ( this view ofcourse can change as we move ahead).
Happy Trading
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Nifty Buy/Sell Algorithm
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