Its another down day for the markets ,after an initial rise ,the participants rushed to sell,they are not letting even a small rally to sustain ,markets closed at 4907 with a loss of 21 odd points.The market breadth stood undoubtedly in the favor of the bears with 484 advances to 994 declines.As advocated in previous blog ,sell on rise is the call for these markets,until reversal of trend is proved with enough weight of evidence.
This fall from the top is continuously showing lower high and lower lows ,implicating vital characteristics of bearish trend.Also i would like to bring to your notice that the technical indicator are trading in the oversold region,keeping this in view i expect the downfall to continue for some more 100-150 points.The MACD to is showing good divergence from its signal line after a negative crossover.
Taking a look at the larger picture,we can see that the markets have given a higher high preceding the previous bull rally,yet its low is not violated,which is restricting my bearish view on the markets for the short term,with the hope of a bull rally in the intermediate term . So not going too far with the analysis ,traders short the rallies ,be cautious as turning points are the most difficult ones to decipher.If weakness persists look for 4770 in coming days and be positioned accordingly,and if violated then alternatives of 4500 opens up
Yes you are right! It is a short term sell off. I would also like to add here that Nifty has made a descending right angle triangle with an approx. target of 4740 to the downside. Better wait n watch.
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