Medium Term Trend: ↑UP (Changes to down below 10650)
Still Sideways: Nifty continues to trade in a tight range between 11100 and 11200. It opened around 11200 but couldn't sustain there and dropped to 11100 once again & finally closed at 11225 levels with a loss of 70 points.
Nifty has been sideways now since last 3-4 trading session which is indicating that we have entered some sort of correction mode. Now how this correction moves going forward , is something we will have to see. Corrective moves are very difficult to predict hence difficult to trade. During corrective moves, market gives a sharp swing in a flash then spend most of the time doing nothing. Like today it dropped to 11100 in first hour itself but after that spent entire day doing almost nothing. Such moves are often indicative of ongoing corrections.
Now like we mentioned in the previous post, till we see a strong move above 11250-300 levels, the correction is likely to continue. On the downside we have good support in 10925-11000 range and any drop should be able to find at these levels. a drop below 10925 however could invite further selling markets can drag Nifty till 10700-10650 levels ( which is the final support for this entire uptrend).
The levels around 11200-11300 are very important levels, lets see why.
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| Nifty Daily |
In March, when this downfall began, markets had dropped to around 11200-11300 levels and then had spent nearly 4-5 trading sessions in this range ( exactly like what it is doing now). After 4-5 trading sessions markets gave a breakdown and went as low as 7500 in a matter of 8-10 trading sessions. So actual carnage begin only when this range was broken on the downside. Since it was such an important zone earlier, its likely to offer significant resistance to Nifty now. Since last 4-5 trading session we are again seeing a range bound movement ( similar to early march). Now we are not saying that a break down is going to happen again, no, all we are saying is that since this was a crucial level and a significant support in March, its possible that now it offers some sort of resistance now. Last time we saw a breakdown once this range was crossed on the downside, who knows this time we could even see a breakout on the upside.
However till that time we see a breakout, it makes sense to be cautious at current levels and go for some profit bookings (if not all) as some more weakness is very much possible.
Happy Trading!
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