Nifty: Correction Projection

NSE:NIFTY   Nifty 50 Index
There were two important points which I mentioned in my earlier longer term views on Nifty >>

1) I said that there are good chances that market could reverse from 10036. Why I said that? See the following post >>>>

Market extended a little further upto 10137 and everybody knows what happened next.

2) Second point was related to corrections. Market loves 50% retracement level and respected it at many junctures. See the following post >>>>

I am expecting same if this correction continues from here (9710).

I hope everyone agrees at one point that market is correcting. A very obvious question that comes to mind is that HOW FAR IT CAN CORRECT?
Another question that comes to my mind is that through which possible route/path. Possible halts, strong supports which can offer pullbacks and possible reversal points are also very important to be discussed.

I am limiting this discussion to 2 possible bearish only scenarios. Plz . remember that I am not trying to predict anything and the following analysis is purely based on numbers.

Scenario 1) Market pulls back from the current 9710 level.

In this case 9840 will be a possible level which may provide sufficient supply to push the index down to 9685 again.

1(a) Market halts near 9685:

Market halts, forms a type of bottom and gradually moves up along the trendline (shown in chart) for a few days to taste the CAUTION ZONE (9873-9975). A strong reversal can be expected from this level towards 9700 and then to 9600.

# At 9600 one has to be cautious on bear side until confirmed continuation starts below this level. Because there is some probability that this
corrective wave ends near 9600 and market continues its long term uptrend.

# If the downtrend is confirmed below 9600, then I would say 9015/9025 are quite possible. And that coincides with the 50% retracement (from
7894 to 10137) we were talking about.

1(b) Market doesn't stops near 9685 and corrects further near 9600.

The end of this down wave may be followed by a weaker pullback which may push the price to 9700-9800 zone. Strong reversal can be expected at the end of the pullback which may continue till 9015.

Scenario (2) Market does not pulls back from 9710 and slams down to 9600

In this case any pullback to 9700 should be taken as a selling opportunity to target 9600 or lower.

Here too I expect a larger and weaker pullback at the end of this downwave which could last for a few days. The rally may end in 9700 and 9850 zone before the downtrend continues towards 9015.

Important points

1) Break below the (green) trendline shown in the chart would confirm the downtrend
2) In both the above scenarios, at the end of the current down wave, a larger and weaker pullback is expected which could last for a few days.
The extent has been discussed above
3) A strong case for reversal has been put near the 9000 level.

Trade safe
Hit like if this information is useful
Happy weekend

Comment: Its near 9840. Will it reverse or pass ??
Comment: whoop! 9855.. I ll consider it a hit for the above mentioned target
Comment: We are in a short term uptrend on this 15min. chart. There is a resistance @ 9885 which might drag the index to 9820/9830. If the uptrend is to continue, It may offer a buying opportunity at that level.

But If it doesn't correct and breaks 9885 first, then 9920/9930 seems to be an easy target.

Nice presentation and well described scenarios and possibilities.
But whats yur GUT feel..?
Bravetotrade naveen_agrawal
@naveen_agrawal, it's quite difficult to predict. But looking at the strong downward impulse, it seems correction has more legs. And historical market behaviour suggests that 9000 is possible.
+1 Reply
naveen_agrawal Bravetotrade
@Bravetotrade, Thanks
Bravetotrade naveen_agrawal
@naveen_agrawal, welcome.
It seems, that a far lower bottom around 9000 and a longish time wise correction is needed to make a firm bottom for the decisive next up move. I feel by that time the GST effect would be fully visible in the results of the nifty constituents and all headwinds would be factored into.

Using your analysis I would put my money on nifty making a firm bottom around 9000.keep up the good work.
@HARDWIRED_AMIT, many a times technical and geo-politico-economic headwinds drive in consonance. While the psychological damage through these environmental factors takes some time to recover, technical analysis may provide some early signals.

Thanks for your comment.
well analysed. To confirm reversal and major correction..Nifty has to do lower top and lower bottom which we need to watch....
Bravetotrade Parasuram
@Parasuram, thank you so much. Yah, lower lows and lower tops are qualifications for downtrend. Also there are trend lines which reflect the trend, a break would be another qualification for change in trend.
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