Medium Term Trend: ↑UP (Changes to down below 9500)
Sharp Recovery: Nifty opened with a huge gap-down today around 9550 levels but staged a remarkable recovery to close in green at 9970. Up 70 points.
Dow crashed big time yesterday and as a result Nifty opened with a whopping 300+ gap down today. Many traders took todays fall as the resumption of down trend believing that pullback got completed at 10300 levels and Nifty now has resumed its fall towards lower levels.
However we had mentioned yesterday "A fall from 10300 towards 10K was expected and it has come now, now probably the most of the correction is done at these levels and markets could try and make some sort of recovery" we had also mentioned that "further weakness below this could be indicative of some pattern changes hence needs to be observed carefully".
Today markets did break below 9850-9900 but it was only temporary and intraday. At closing levels markets have managed to crawl back above 9900 levels. Even in the morning session the lows hits were around 9500 levels which is the final support level and last line of defence for this intermediary upmove. In any case the last support level was held and Nifty moved back above 9900 levels hence nothing changes for now.
Also since last 7-8 days todays is the first day where Nifty has managed to closed strongly above its opening high. All these factors are suggesting that undertone of the markets remains strong and there is a likelihood that Nifty start moving up towards 10300-10500 again. We do not have confirmations on the charts but there are indications. Follow up buying above 10000-10050 levels on Monday will be very positive for the markets.
In Nutshell, Nifty has defended crucial area of 9850-9900 levels on closing basis and that raises the possibility of nifty moving back towards 10300-10500 in coming trading sessions. On the downside, bears needs to make a strong push below 9800 and then 9700 for the down move to gather momentum again else Bulls are likely to seize initiative soon.
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