Medium Term Trend: ☝UP(Changes to Down above 14600)
Nifty @ 14640 down 306 points : Black Monday!
Nifty has been consistently trading weak since last few trading sessions. Infact today was the 6th consecutive day when Nifty closed in red. Even though markets are in Over-sold territory, historically we have seen that oversold trend can continue for long and Markets can go to post 9-10 consecutive negative sessions.
Overall markets have closed near around a very crucial level.14600-640 (which is also todays low) is an important pivotal point for near term. If we see weakness below this level and bears manage to close markets below 14600 in next 2-3 trading session then its possible that this correction gets extended towards 14200-300 levels. So for medium term perspective its important that todays lows are held (on closing basis) for next few trading sessions atleast.
In the last post we had discussed that if 15200-225 support level is broken then market can test 15k (which was the next support zone). Market tested 15K Friday and today broke below it convincingly which has now pushed nifty to last important support at 14600. we had also discussed the possibility of markets forming a 'Bull trap" at 15450 levels. On charts it did appear little short of a bull trap but now probably we can see it was indeed a bull trap only.
On the upside, we now see a significant resistance around 15050 levels ( just above 15K levels) and Nifty needs to overcome it as soon as possible to have any chance of an uptrend resumption. However going by option chain, its looking difficult till expiry atleast( 25th Feb).
In summary, market has developed a strong downward momentum which can take Nifty all the way towards 14200-14300 levels (specially if we get a closing below 14600 levels). On the upside theres a strong resistance just above 15K levels which Nifty needs to surpass soon ( but chances of this scenario playing out are slim, looking at OI position )
Trading wise we were long on Nifty which we exited around 15225 levels itself and entered short positions as soon as 15k was breached.
Happy Trading
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