Nifty Technical Analysis: Outlook and Trend for 12th Oct 2020

Medium Term Trend:  ☝UP (Changes to Down below 11250)

Nifty Continues to Rise:  Nifty has been rising non stop since last 10 trading sessions (posting higher lows) and barring just one trading session it has managed to post a higher high on each trading day.

What we are seeing in markets is a classic example of how markets can continue to run when it in super bullish zone and how it can continue to ignore factors like 'overbought zone' etc. Even though markets are looking tired and momentum is falling with successive rise, there is nothing on the price charts which is suggesting a reversal yet.

On Thursday, we saw 4th consecutive gapup on the daily chart now generally when we see consecutive gaps, after 3-4 gaps markets usually reverses and fill the 4th gap ( in may cases it then goes on to fill all gaps). So to complete this wave of bull run which started from 10800 levels, we need to see this gap filled which is sitting at 11750-11800 levels.

Only when market falls below this area can we expect the completion of this wave (which started from 10800 levels) and markets might go in for some kind of correction and whether that correction is just a temporary breather or turns into some sort of bigger reversal, can be judged later only.

For medium to short term perspective the levels of 11750-11800 and below that 11600 are rock solid support and assumes a lot of importance. Any chance of bigger correction or bigger fall can materialize only if these levels are taken out. Till that happens, markets can continue to move up.

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