Medium Term Trend: ↑UP (Changes to down below 9500)
Yesterday we had pointed out many indicators that were pointing out towards a possible downmove from current levels and had advised caution. We had also mentioned that we are seeing warning sign ahead and with each successive failure to cross 10k the chances of markets moving down are increasing. However with todays move, most of the bearish indicators/factors we were seeing have been negated. Frankly speaking, we didn't expect markets to move the way it has and if it manages to cross 10100 & then hold on to 10050-10100 levels for couple of trading sessions then bulls will further strengthen their position.Negative sentiments surrounding India-China border tensions seems to have played a big hand in pulling markets up (shorts positions had been built up in last 2 days which have been squeezed by the smart money/operator).
Having said this, there is a still a slight chance that move today was just a false break of 10K levels, however for that to come true need a vicious fall tomorrow back below 9900 levels. Spending time around 10100 will only make markets stronger and short squeeze is likely to continue.
Going forward if 10100 sustains then markets in most likelihood are heading towards 10330 and 10550 levels. Entire move from 7500 levels is looing like one contracting triangle or ascending wedge which seems to have completed its 4th ( D) leg and last leg (E-leg) most probably started today. Upon completion of E leg we can see a correction again .So probably the correction we were expecting around 10K levels will come from higher levels ( 10330-10550 or higher). But that is a problem for later date, we will cross that bridge when we get there.
In Nutshell, we were seeing a possibility of a downmove which didnt materialise and market has made a strong move above 10K levels which has negated most of bearish possiblities already ( provided it holds above 10K level for couple more sessions atelast). Now that markets have changed, we have to change as well and since markets have moved above 10K levels ,once again the chances of markets hitting a new high towards 10300 and then 10500 have become stronger hence we change our view.
Yesterday we had pointed out many indicators that were pointing out towards a possible downmove from current levels and had advised caution. We had also mentioned that we are seeing warning sign ahead and with each successive failure to cross 10k the chances of markets moving down are increasing. However with todays move, most of the bearish indicators/factors we were seeing have been negated. Frankly speaking, we didn't expect markets to move the way it has and if it manages to cross 10100 & then hold on to 10050-10100 levels for couple of trading sessions then bulls will further strengthen their position.Negative sentiments surrounding India-China border tensions seems to have played a big hand in pulling markets up (shorts positions had been built up in last 2 days which have been squeezed by the smart money/operator).
Having said this, there is a still a slight chance that move today was just a false break of 10K levels, however for that to come true need a vicious fall tomorrow back below 9900 levels. Spending time around 10100 will only make markets stronger and short squeeze is likely to continue.
Going forward if 10100 sustains then markets in most likelihood are heading towards 10330 and 10550 levels. Entire move from 7500 levels is looing like one contracting triangle or ascending wedge which seems to have completed its 4th ( D) leg and last leg (E-leg) most probably started today. Upon completion of E leg we can see a correction again .So probably the correction we were expecting around 10K levels will come from higher levels ( 10330-10550 or higher). But that is a problem for later date, we will cross that bridge when we get there.
In Nutshell, we were seeing a possibility of a downmove which didnt materialise and market has made a strong move above 10K levels which has negated most of bearish possiblities already ( provided it holds above 10K level for couple more sessions atelast). Now that markets have changed, we have to change as well and since markets have moved above 10K levels ,once again the chances of markets hitting a new high towards 10300 and then 10500 have become stronger hence we change our view.
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