Medium Term Trend: ↓Down (Changes to up above 9800)
Flat Day: Nifty dropped to 9050 levels but held on to it and managed to close flat at 9140 levels.
We had mentioned in yesterdays post that as long as Nifty defends 8950-9000 support we can still hope for a fresh bull run. Defending this support zone and then filling the gap down area at 9250-9350 could push Nifty once again towards 9500 and 9800 levels.Today Nifty did test 9050 levels and moved up a little so its possible that support is tested already or at the same time one more fall towards 8950-9000 level can not be ruled out.
On daily charts, Nifty formed a hammer pattern which is a bullish pattern. Holding on todays high and then closing the gap area at 9250-9300 will bring bulls back in the game. Its possible that markets have set their eyes at a higher target ( 10K+) and all this choppy and sideways movement is just a ploy to get weak traders out of market . The fall of last 2-3 days we are seeing (after the economic package was announced) is also pointing towards this scenario only.
Keep in mind the package announced is indeed positive for the markets but sometimes markets do not react to positive news immediately but they take their time and create a perception that its not important. They fall a little and short term traders start moving out and once the euphoria around the news dies, then only market start moving up. I am not saying this is how its happening presently but a strong possibility exists.
If you see the rise from 8950 levels (21Apr) to 9870 (30th Apr) had taken 7 trading sessions and since then (in May series) Nifty has taken 10 days already and its still trading above 8950 level. Inspite of consuming more time the fall is not able to retrace 100% of the rise. This is also suggesting that probably the entire fall from 9800 levels is just a corrective move.
Eventually we expect 9300-9500 levels to give way but the timing is something market only decide. It might decide to spend some more time at current levels or it might decide to fall little more from here but ultimately it should move up.
Overall the trend continues to be down for now and any larger upmove is expected only once Nifty crosses above 9800. At the same time its likely that major portion of the correction already got over at 8000-8500 levels and we do not see more correction ( price wise) but time wise correction can take place (and is happening actually). Since last one month, markets are trading roughly at the same level.
Moving into next week we need to see if 8950-9000 level holds or give up and if holds then whether markets are able to fill the gap down area of 9250-9350 zone. That will give us further insights.
Nifty Buy/Sell Algorithm
Flat Day: Nifty dropped to 9050 levels but held on to it and managed to close flat at 9140 levels.
We had mentioned in yesterdays post that as long as Nifty defends 8950-9000 support we can still hope for a fresh bull run. Defending this support zone and then filling the gap down area at 9250-9350 could push Nifty once again towards 9500 and 9800 levels.Today Nifty did test 9050 levels and moved up a little so its possible that support is tested already or at the same time one more fall towards 8950-9000 level can not be ruled out.
On daily charts, Nifty formed a hammer pattern which is a bullish pattern. Holding on todays high and then closing the gap area at 9250-9300 will bring bulls back in the game. Its possible that markets have set their eyes at a higher target ( 10K+) and all this choppy and sideways movement is just a ploy to get weak traders out of market . The fall of last 2-3 days we are seeing (after the economic package was announced) is also pointing towards this scenario only.
Keep in mind the package announced is indeed positive for the markets but sometimes markets do not react to positive news immediately but they take their time and create a perception that its not important. They fall a little and short term traders start moving out and once the euphoria around the news dies, then only market start moving up. I am not saying this is how its happening presently but a strong possibility exists.
If you see the rise from 8950 levels (21Apr) to 9870 (30th Apr) had taken 7 trading sessions and since then (in May series) Nifty has taken 10 days already and its still trading above 8950 level. Inspite of consuming more time the fall is not able to retrace 100% of the rise. This is also suggesting that probably the entire fall from 9800 levels is just a corrective move.
Eventually we expect 9300-9500 levels to give way but the timing is something market only decide. It might decide to spend some more time at current levels or it might decide to fall little more from here but ultimately it should move up.
Overall the trend continues to be down for now and any larger upmove is expected only once Nifty crosses above 9800. At the same time its likely that major portion of the correction already got over at 8000-8500 levels and we do not see more correction ( price wise) but time wise correction can take place (and is happening actually). Since last one month, markets are trading roughly at the same level.
Moving into next week we need to see if 8950-9000 level holds or give up and if holds then whether markets are able to fill the gap down area of 9250-9350 zone. That will give us further insights.
Happy Trading
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Nifty Buy/Sell Algorithm
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