Medium Term Trend:☝(UP) - Reversal level below 17100
Nifty @ 18040 up 2%- 18K reclaimed, bulls stamp their authority
Discussed in previous post "........ a double bottom around 17K levels which suggest a solid base is formed around 17k levels from where markets might attempt to launch itself towards 17500-17800 levels"
Markets did even better and moved above 18k levels very quickly indeed ( todays move credited to HDFC twins which single handedly pulled markets above this key psychological level). Having said this, its not really a surprise that we have moved back above 18K levels. It was always on the card and a strong possibility and that is the reason we have been advising against going short and instead use all dips to buy. Since last 2-3 weeks Nifty has moved from sub 16k levels to back above 18k levels, justifying our stance.
Now going forward we can see some consolidation or hesitancy around at 18100-18300 levels (which is justified) however no major weakness is visible on the charts yet and it wont be a surprise if Nifty moves even further from here. On the downside, levels around 17650 level should act as immediate support and could be a good support area to buy. If 17650 is broken then we can fall towards 17100-17200 levels which is the medium support area for this entire move (chances of this scenario playing out is slim though).
In Nutshell markets are strong and the strength likely to continue for now, small dips/consolidation should not be construed as sign of weakness so dont be fooled by them. Markets seems to have trapped Bears ( gap-up openings are indicative of that) hence any significant fall (which takes market below 17K levels) is looking less and less probable now.
Happy Trading
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