When everybody in the market expects market to come down, market always reacts opposite. The same happened this time. Everybody was bearish on market and giving down targets. After breaking a low of 4632, Nifty made a new low of 4538. All market participants were expecting Nifty to come down to 4300-4000 level but Nifty reacted differently. Nifty gave a good bounce back in January and came back again to 5149 level. Is market bottomed out????
I will wait for confirmation. Still there are no signs of trend reversal in Nifty. Neither I found any trend reversal pattern nor Nifty has made Higher High and higher low (previous high 5402 is still intact). So I will wait and watch.
Let us assume Nifty has bottomed out then also it will have to come to 4850-4900 before making new High. If Nifty takes support at this level and gives bounce back and makes a new High, then only we will mark this as trend reversal. Second level of confirmation will come once Nifty breaks 5400 level.
Now let’s look at the chart; whenever RSI is near 70, Nifty has changed the trend. It has started coming down from that level. Since last one year whenever Nifty is coming down volumes are high and low on bounce back. In this bounce back also volumes are low.
IT, Metals, Power, Real estate, Oil & Gas
We may see profit booking in following sectors:
Consumer Durables, Capital Goods, Mid Cap and Small cap
Following sectors will Out-perform the market:
FMCG , Auto, Banking & Health Care
To Conclude, Nifty has not bottomed out yet. We will wait for confirmation. Confirmation will come only if Nifty makes higher low around 4850-4900 and then makes new High. If not, then we are still in down trend and down trend will resume once again below 4780.
WAIT AND WATCH FOR CONFIRMATION. Happy trading!!!!!!!
I will wait for confirmation. Still there are no signs of trend reversal in Nifty. Neither I found any trend reversal pattern nor Nifty has made Higher High and higher low (previous high 5402 is still intact). So I will wait and watch.
Let us assume Nifty has bottomed out then also it will have to come to 4850-4900 before making new High. If Nifty takes support at this level and gives bounce back and makes a new High, then only we will mark this as trend reversal. Second level of confirmation will come once Nifty breaks 5400 level.
Now let’s look at the chart; whenever RSI is near 70, Nifty has changed the trend. It has started coming down from that level. Since last one year whenever Nifty is coming down volumes are high and low on bounce back. In this bounce back also volumes are low.
Following Sectors looking weak on Charts:
IT, Metals, Power, Real estate, Oil & Gas
We may see profit booking in following sectors:
Consumer Durables, Capital Goods, Mid Cap and Small cap
Following sectors will Out-perform the market:
FMCG , Auto, Banking & Health Care
To Conclude, Nifty has not bottomed out yet. We will wait for confirmation. Confirmation will come only if Nifty makes higher low around 4850-4900 and then makes new High. If not, then we are still in down trend and down trend will resume once again below 4780.
WAIT AND WATCH FOR CONFIRMATION. Happy trading!!!!!!!
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