Medium Term Trend: ↓Down (Changes to up above 9800)
Weakness: Nifty opened flattish and broke below the key support zones of 8950-9000 levels to close at 8825 levels, down ~300 points.
In last few posts we have been mentioning that 8950-9000 is a very good support zone and we do not expect it to be broken easily. Now today it has broken conclusively however since its such a critical support zone, we need to see one more close below this level ( and then weekly close) to conclude that its broken for good.
We all know what happened when Nifty had closed above 9850 on expiry day. 9800 was such a important resistance level and though Nifty managed to close above it, it failed to give 2 consecutive close above it and has declined more than 1000 points from there. Overall market continues to be in down trend but levels around 8900 is a strong support zone and probably the last hope for the bulls. If its broken successfully and conclusively then there will be very little left for the bulls to look forward too.
Sustaining below 8900 could push Nifty back towards 8500-8000 levels and if that happens then the chances of this correction extending for a long period (time wise) will become strong and that will not be a positive sign.
There is still a chance that the fall we are seeing since last few days is just a move by markets to remove weak/short term traders who entered on the back of economic package news. However to prove this scenario right, we must make a fast (very fast) recovery from these levels towards 9200-9300 levels. at the time of writing this post SGX is trading at 100+ points so it needs to be seen if it can build on further gains and propel itself higher back towards 9200-9300 range.
Though every thing is looking bleak at the moevemnt, its still too early to conclude anything. We recommend observing markets for few more sessions before concluding anything Nifty can still surprise by giving a strong move on the upside from here.
Nifty Buy/Sell Algorithm
Weakness: Nifty opened flattish and broke below the key support zones of 8950-9000 levels to close at 8825 levels, down ~300 points.
In last few posts we have been mentioning that 8950-9000 is a very good support zone and we do not expect it to be broken easily. Now today it has broken conclusively however since its such a critical support zone, we need to see one more close below this level ( and then weekly close) to conclude that its broken for good.
We all know what happened when Nifty had closed above 9850 on expiry day. 9800 was such a important resistance level and though Nifty managed to close above it, it failed to give 2 consecutive close above it and has declined more than 1000 points from there. Overall market continues to be in down trend but levels around 8900 is a strong support zone and probably the last hope for the bulls. If its broken successfully and conclusively then there will be very little left for the bulls to look forward too.
Sustaining below 8900 could push Nifty back towards 8500-8000 levels and if that happens then the chances of this correction extending for a long period (time wise) will become strong and that will not be a positive sign.
There is still a chance that the fall we are seeing since last few days is just a move by markets to remove weak/short term traders who entered on the back of economic package news. However to prove this scenario right, we must make a fast (very fast) recovery from these levels towards 9200-9300 levels. at the time of writing this post SGX is trading at 100+ points so it needs to be seen if it can build on further gains and propel itself higher back towards 9200-9300 range.
Though every thing is looking bleak at the moevemnt, its still too early to conclude anything. We recommend observing markets for few more sessions before concluding anything Nifty can still surprise by giving a strong move on the upside from here.
Happy Trading
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Nifty Buy/Sell Algorithm
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