Worst may not be over for market yet

NIFTY

Last month I predicted markets to start falling post diwali. I think I was early by 10 12 days. As soon as the major players had declared earnings, markets started to fall.

I was beginning to think that this year markers are different from past 15 years. All the major companies in daily or hourly charts were giving buy signal post Diwali and those buy signal were coupled near earning declaration date of companies which made me ignore the signals. And later post results the price fell. It happened with most of the companies. The ones giving sell signal turned bullish post results. This month I took some buy signals in the start, thinking I might be wrong and markets turned 4 5 days after that.

This is the third time markets are trying to correct. Previous corrections were failed corrections. This time I suppose this correction will sustain. Those in the market with experience know that healthy corrections can be from 10 to 20% in numbers. We may get that correction this time. Budget is scheduled on 1 February and markets will take cues for further upside from that.

In past week, we saw market giving a roller coaster ride to 10120. I mentioned in comments that we may see some bounce from 10120. I won't be surprised if markets move to 10250 10270 levels tomorrow. That won't be a trigger for going bullish again. What's next can only be predicted after 3 4 trading days. Till then my bias is again bearish. If nighty gives a proper channel breakout to upside or ema rejection to upside then I will consider a valid buy else it's a dead cat bounce and we may see downward rally till 9800 and even more.

I will keep my views posted.

Comment:

Suddenly the dynamics are changed.
1. Moodys Rating
2. Crude went further down.

Lets see which news plays the spoiler for bears.

Comment:

ifty traded in a narrow range today. Bulls are slowly gaining momentum. If nifty doesn't fall below 10260 in one or two sessions then we might see bullish sentiment prevailing in the markets. On 2 Hourly chart and Daily charts, Nifty is taking support and bouncing exactly at its 22 and 50 SMA which can cause a fresh trend to upside if not broken. Also, there was OI addition to 10400 calls and 10200 puts suggesting the range for this expiry should be between this. Till we get some clarity, it is wise to look at stock specific activity in coming days. We just have 8 trading days left this month.

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