Medium Term Trend: ↑UP (Changes to down below 11275)
Weakness Creeping In: Nifty attempted to move above 11600 but failed and crashed below 11500 levels. Recovered a little towards the end and managed to close just above 11500 levels.
In the previous post we had mentioned that :
"So in nutshell, a move above 11575-11600 levels could mean that consolidation is over and Nifty is ready to test higher levels however a drop below 11500 level could indicate that the consolidation is still in progress".
Yesterday we had posted a tweet just before market opened for trading stating that consolidation seems to be over and market might break on the upside ( if opening gains sustained).
Nifty opened above 11550 levels but traded flat and failed to post any sizeable gains above 11550 levels and didn't manage to cross 11575-11600 levels. Though frankly speaking we were expecting markets to break above 11600 in Fridays session as timewise the consolidation pattern was looking completed on charts. However it wasn't so and as soon as Nifty broke below 11520 levels it became clear that pattern is evolving and markets may spend some more time consolidating.
Fridays fall has opened up couple of scenarios for the market. It has once again put markets in a possible correction mode which could push Nifty towards 11350 level. Nifty has good support in 11325-11350 zone and below that 11275 is the final proven support levels. Unless 11275 breaks , we don't expect too much weakness in the market and after consolidation is done we expect market to take out 11600 levels.
Looking at charts we have no doubts that 11600 will be broken on the upside but before that there could be some more pain left (in form of consolidation and sideways movement). On the upside a move above 11600 levels will confirm the break on the upside.
So in nutshell, consolidation and sideways moves still continues (though we were hoping for it to end on Friday but it didn't materialize). On the upside a break of 11600 levels will confirm the completion of this consolidation and Nifty might open a new leg on the upside. Failure to do so, on the other hand, could push Nifty towards 11350 where we expect immediate support. Below 11300-275 we are looking at extended correction which could take Nifty much lower (towards 11K levels).
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