Medium Term Trend: ☝UP (Changes to Down below 11450)
Much awaited Correction: After rising non stop for last 11-12 days, Nifty finally corrected and it corrected big time. Market witnessed a free fall of around 300 points. It opened above 12K levels but broke below 11700 levels and in the end closed at 11680.
This correction was long awaited and expected hence not a surprise, momentum was falling since last few days and it just needed a trigger which it found today. Today market formed a bearish engulfing candle on daily chart ( meaning todays open price was higher than yesterday's high and close was below yesterdays low). Last time we saw such a pattern made was on 28th Aug ( around 11750 levels) and after that in next few trading sessions market dropped to 10800 levels.
Now we are not saying that a similar fall will be seen again but its a possibility that if we trade below todays low in next 2-3 trading sessions then we can fall a bit more from here towards 11500-450 levels ( which is the medium term pivot level). However holding todays low and moving above 11900 levels would be positive for Nifty. Overall we expect Nifty to break above 12K levels and move towards 12400 eventually.
Same thing we were saying about 11600 levels too previously ( when nifty was finding resistance) now its natural for markets to see some selling pressure around 12K levels its only healthy for markets. Once this consolidation is over and weak hands leave market, it should resume its uptrend.
In summary, holding 11650-675 levels will be positive for market and Nifty could see the resumption of uptrend , break below this level (closing basis) could push Nifty a bit more lower towards 11500 but looking at charts further fall below 11500 is looking highly unlikely for now (ofcourse tomorrow if chart changes, then our views will change as well). As far trading is concerned we had entered long position at 11370 levels which were squared off at 11840 levels yesterday. So for now we advise caution and one should wait and watch before taking a trading call.
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