Nifty - breached 20EMA with a bullish candle, down from here?
Updated
Nifty could continue the strong momentum tomorrow and breach 17562- in this case we can be reasonably confident that the uptrend would continue.
However more likely is to see a pullback towards a strong support level of 17246 (virgin cpr of today)- if this is broken, then it opens the journey to 17001 and below (levels marked in the chart).
Why is downtrend more likely-
1. FIIs = Single biggest factor- they sold 579cr only today in the cash market, which is probably the reason for the rally. DIIs bought for 1736cr. We need to watch out for their action tomorrow.
2. Put call ratio has gone through the roof- contrarian view indicates that the market would reverse - ie go down soon.
3. Pullback over, the downtrend could continue on the daily charts- particularly if the 20EMA is breached and acts as a resistance tomorrow.
Let us see if the projected gap up opening reverses on opening tomorrow.
However more likely is to see a pullback towards a strong support level of 17246 (virgin cpr of today)- if this is broken, then it opens the journey to 17001 and below (levels marked in the chart).
Why is downtrend more likely-
1. FIIs = Single biggest factor- they sold 579cr only today in the cash market, which is probably the reason for the rally. DIIs bought for 1736cr. We need to watch out for their action tomorrow.
2. Put call ratio has gone through the roof- contrarian view indicates that the market would reverse - ie go down soon.
3. Pullback over, the downtrend could continue on the daily charts- particularly if the 20EMA is breached and acts as a resistance tomorrow.
Let us see if the projected gap up opening reverses on opening tomorrow.
Trade closed: target reached
market went down as predicted towards the support level marked on the chart and then also hit the resistance level marked on the chart on the uptrend.
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