Medium Term Trend:👇(Down) - Reversal level @ 17300
Nifty @ 16605 down 190 points- Weakness Continues
In our last post we had mentioned- ".......... Nifty has been making H&S pattern form Dec last year, neckline of same is sitting around 16850 levels. a break below neckline can open downside targets anywhere from16k to 15K levels. hence caution is still advised"
Market failed to move any higher & in next 4 trading sessions crashed to 16200 levels. 'H&S' neckline and much talked about support level of 16800-900 was broken with a huge gap-down. Though Nifty has bounced back from the recent low of 16200, its still trading below 16800-900 ( previous support turning into resistance now?).
Now moving forward we see a lots of skepticism and though quite a few things have been priced in by markets already some additional bad news could drag Nifty below 16k levels. Having said this, markets are hanging around just below 16800 levels which also raising a possibility that worst is probably priced in now and markets could start recovering slowly from here ( hanging just below important support areas after breaking them convincingly is also in a way positive only).
On a high level, if you remember we had mentioned in previous posts that overall markets could trade in a broad range of 16500-18500. Till now market seems to be moving broadly in this range only. So going forward it will be interesting to see if markets manages to maintain this range inspite of negative news flow.
In summary, inspite of so much weakness and skepticism, holding 16400-500 levels could push Nifty towards 17K-17100 levels. On the other hand continuous weakness below 16400 could drag nifty towards 16K and lower levels. VIX is pointing at 30 which is pretty high so its best to avoid trading for next few days and wait for VIX to cool off.
Happy Trading!!
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