Nifty Technical Analysis: Outlook and Trend for 11th Sep 2020

Medium Term Trend:  ↑UP (Changes to down below 11275)

Back at 11450:  In the last couple of days Nifty has shown remarkable resilience and moved from sub 11200 levels back towards 11450 levels.

Yesterday, markets broke below 11275 and dropped to 11180 level but managed to bounce back and closed just above 11275 levels. 11275 is turning out to be extremely resilient and strong support (much stronger than what we had anticipated it to be). Yesterday it was protected on closing basis and today we saw a sharp bounce back from there.

Now in last couple of posts we had a bearish tone and suggested that things are not looking bright for bulls and markets could see some accelerated selling from 11300 levels. We had also mentioned that its highly likely that markets will break below 11275 levels But we kept the medium term trend as 'up' till we saw a closing below 11275 levels.

Move which we have seen in last 2 days has the capability to change the short term trend again (to up) provided market manages to move above 11520-540 levels in next 1-2 trading sessions. A successful move above these level could be an indicator that correction is over and market has resumed its uptrend towards 11800 or higher levels.Next couple of days are going to be crucial and it will be interesting to see which way Nifty moves. Twice Nifty has seen sell off from 11450-60 levels and incase we see sell off again and Nifty goes below 11300 then once again bearish possibilities will start opening up.

Another thing worth mentioning is the formation of bullish island reversal pattern on chart. Yesterday we had seen a gapdown opening and today the same gap area is filled with a gapup. This Gap stands around 11300-330 levels so for any bearish scenario to unfold this gap area should and must be filled in next 2-3 trading sessions.

So in summary, things have changed in last 2 days and even though we did see some selloff below 11275 levels, it was short-lived and markets bounced back above it on the same day. Now if 11275 holds and market moves above 11520-540 levels, then we are once again looking at higher levels towards 11800 Failure to do that and moving back below 11275 levels could be a sign of some deeper correction to come.

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