After three wave move nifty fell continuously for two days and back in to the base channel.
we are not yet sure whether the rise was an impulse wave.
on Friday after gap down opening nifty had fallen to support 1.
from that support it had bounced to cross the opening price but could not sustain
and fell to violate support 1.Now it is at the lower channel line of the base channel.
Nifty may fall back to support 2 and pull back in to the channel.
and may not violate the support 2 again in that case it will be positive for nifty.
stochistic is in over sold condition and cross over there will generate powerful hidden divergence
as shown in the chart. in that case nifty may rose further. hence in case of any long position stop loss must be there
as shown in the chart.
Incessant selling from FII in the absence of huge buying from DII nifty may violate support 2 ,,base channel and stop loss too.
further decline may take place and zigzag correction may continue.
Result reaction of reliance is crucial for nifty. At present scenario I am neutral on nifty looking for further confirmation.