Medium Term Trend: ↑UP (Changes to down below 10240)
Upmove Maturing?: Nifty traded around 10800 level for most part of the day but gave up all the gains in last hour and broke below 10700 levels. It closed at 10705 levels with a loss of 90 points.
In the previous post we had mentioned "this could be the area ( level around 10850) where we see some pause or consolidation. Markets have run up sharply and are now beginning to enter overbought zone so its not wrong to start expecting some hesitancy at these levels"
Now yesterday and today we saw exactly that and Nifty paused and today even declined slightly exactly from 10850. Now what to expect in next few trading sessions? Going forward unless Nifty makes a sharp move above 10850 levels, we can expect this correction to continue. Now this correction can be sideways or pricewise but that is something we will know in next couple of trading session. If its a sideway correction should finish between 10500-10700 and if its a pricewise correction then we can move towards 10250-10300 levels once again but should not fall beyond that. In case Nifty goes on to test 10250 levels and breaks it then we are looking at major correction and possible trend reversal for medium term.
So if its just a correction then it should complete above 10250 levels moving below 10250 could be bearish and indicative of a larger move on the downside.
Today, intraday charts, Nifty has made an 'bearish engulfing candle' which is a negative sign for short term hence profit booking at these levels is advised. To counter this negative impact, Nifty needs to move sharply above 10850 else for a short term it seems that a top is done today already.
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