Nifty has been experiencing a correction after hitting a top
of 9119.20 during the month of March last year. This correction has occurred in
a channelized manner and today nifty has witnessed nice recovery from 7241.50
after testing support line of this bearish channel. However, there is no evidence
of bottom on chart and bulls need to establish a move above 7500 to claim their
presence. Index is staying below 5 days exponential
moving average from last few days that suggests accelerated down trend. MACD
indicator has been staying below center line and still it’s loaded with bearish
momentum that remains a supporting factor for NIFTY bears. However, 14 periods
daily RSI is testing oversold territory but it is also staying below its 9
periods moving average that keeps on going down trend intact. 2 Fibonacci
projections are converging near 7220-7187 zones. These are the areas where
NIFTY might get support. If nifty manages to spend considerable time below 7180
zones then down trend might extend towards 6800 zones otherwise a potential
bottom can be expected around 7180-7220 zones for a jump towards 7400-7470
zones. Recovery and stability above 7600 zones needed to confirm a short term
bottom and trend reversal otherwise this index will remain under bearish threat
with ceiling at 7600 and every rise will be a selling opportunity whereas stability
below 7180 will open the doors for 7000-6800 zones.
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