Medium Term Trend: ↑UP (Changes to down below 9500)
Building Strength: Nifty continued its upward march and touched 10250 levels. It closed with a solid gains of 150+ points.
Yesterday we had mentioned that if Nifty manages to sustain 10050-11100 levels then further gains towards 10350-550 levels are expected. Bears would have had a chance only if markets had seen a strong fall back below 9900 however once markets opened above 11100 it became clear that markets are headed towards higher level.
Now looking back, Nifty had seen some correction from 10300 levels towards 9500 levels and we had turned cautious as soon as Nifty touched 10300 levels. We did see some sharp fall from those levels and they way Nifty kept reacting from 10k levels had raised a strong possibility of retest of 10500 levels However that didn't materialize ( mainly due to short positions created because of negative news flow around India-China tension).
In last 2 days we have seen quite a bit of short covering and its likely to continue till expiry atleast. There are still few shorts in the system ( probably holding with a SL of 10300 odd levels) therefore there is a high probability that markets will make a move beyond 10300 levels now ( probably towards 10500 levels).
Overall a correction is due now in our markets but before that happen, we can see one more rally/push on the upside.Overall the entire pattern of last 2-3 months ( from lows of 7500) is looking like a contracting wedge whose E leg ( last leg) seems to have started yesterday. Now it remains to be seen if the pattern indeed develops like a ascending wedge or market has other plans ( wedge usually are difficult to confirm till they are actually completed or are on verge of completion). One needs to continuously observe markets to see how the pattern develops , if it indeed is a wedge formation then we can see another move below 10k once its completed.
In Summary, market near term trend remains up and the way markets are trading is giving an impression there are quite a few shorts still left in system hence shorts squeeze we are witnessing is likely to continue ( probably till expiry).
Building Strength: Nifty continued its upward march and touched 10250 levels. It closed with a solid gains of 150+ points.
Yesterday we had mentioned that if Nifty manages to sustain 10050-11100 levels then further gains towards 10350-550 levels are expected. Bears would have had a chance only if markets had seen a strong fall back below 9900 however once markets opened above 11100 it became clear that markets are headed towards higher level.
Now looking back, Nifty had seen some correction from 10300 levels towards 9500 levels and we had turned cautious as soon as Nifty touched 10300 levels. We did see some sharp fall from those levels and they way Nifty kept reacting from 10k levels had raised a strong possibility of retest of 10500 levels However that didn't materialize ( mainly due to short positions created because of negative news flow around India-China tension).
In last 2 days we have seen quite a bit of short covering and its likely to continue till expiry atleast. There are still few shorts in the system ( probably holding with a SL of 10300 odd levels) therefore there is a high probability that markets will make a move beyond 10300 levels now ( probably towards 10500 levels).
Overall a correction is due now in our markets but before that happen, we can see one more rally/push on the upside.Overall the entire pattern of last 2-3 months ( from lows of 7500) is looking like a contracting wedge whose E leg ( last leg) seems to have started yesterday. Now it remains to be seen if the pattern indeed develops like a ascending wedge or market has other plans ( wedge usually are difficult to confirm till they are actually completed or are on verge of completion). One needs to continuously observe markets to see how the pattern develops , if it indeed is a wedge formation then we can see another move below 10k once its completed.
In Summary, market near term trend remains up and the way markets are trading is giving an impression there are quite a few shorts still left in system hence shorts squeeze we are witnessing is likely to continue ( probably till expiry).
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