Medium Term Trend: ↓Down (Changes to up above 9800)
Weakness to the fore: Nifty tumbled today to close around 9300 levels, down by a whopping 550 points.
9800 was the keep pivotal area for medium term and we repeatedly had mentioned that Nifty upmove could stretch till 9800 zone but further gains are likely only when this level is successfully crossed. On Thursday Nifty did manage to close above it but failed to give 2 consecutive closes above this level. Since Thursday was expiry day, we needed one more close above 9800 to confirm if the level is actually broken.
Todays sharp fall has put a brake on the recent upmove and raised doubts if market has reversed from here. In our opinion its too early to conclude anything and we need to observe markets a little more to make a sense of whats happening. Nifty can still make another dash towards 9800 levels and if weakness persists then a drop towards 8500-8700 levels is also a possibility from here.
On the downside levels around 9050-9100 assumes lot of significance and could be the last support for bulls. If its broken then chances are markets will fall towards 8500-8700 levels. On the other hand to keep the bullish possibilities open Nifty must fill the 'gapdown' it has formed on daily charts. On Thursday Nifty had opened with a gap up around 9650 levels and today the same gap-up is negated by a 'gapdown' (this is called island reversal pattern). Island reversal pattern is a bearish reversal pattern and has bearish implications (if the gap down area is not filled up in next few trading sessions).
For now the strategy should be to wait and watch!
Nifty Buy/Sell Algorithm
Weakness to the fore: Nifty tumbled today to close around 9300 levels, down by a whopping 550 points.
9800 was the keep pivotal area for medium term and we repeatedly had mentioned that Nifty upmove could stretch till 9800 zone but further gains are likely only when this level is successfully crossed. On Thursday Nifty did manage to close above it but failed to give 2 consecutive closes above this level. Since Thursday was expiry day, we needed one more close above 9800 to confirm if the level is actually broken.
Todays sharp fall has put a brake on the recent upmove and raised doubts if market has reversed from here. In our opinion its too early to conclude anything and we need to observe markets a little more to make a sense of whats happening. Nifty can still make another dash towards 9800 levels and if weakness persists then a drop towards 8500-8700 levels is also a possibility from here.
On the downside levels around 9050-9100 assumes lot of significance and could be the last support for bulls. If its broken then chances are markets will fall towards 8500-8700 levels. On the other hand to keep the bullish possibilities open Nifty must fill the 'gapdown' it has formed on daily charts. On Thursday Nifty had opened with a gap up around 9650 levels and today the same gap-up is negated by a 'gapdown' (this is called island reversal pattern). Island reversal pattern is a bearish reversal pattern and has bearish implications (if the gap down area is not filled up in next few trading sessions).
For now the strategy should be to wait and watch!
Happy Trading
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Nifty Buy/Sell Algorithm
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