Disclaimer: These are my personal thoughts and not trading advise. To view the full chart, right click on the thumbnail and open in new window.
Another steady day in the markets, albeit, with a downward bias. Today the Nifty extended its closing weakness of Monday. The movement of the Nifty seems in the nature of consolidation rather than the beginning of a downward movement. We may see tomorrow continue downward in a ranged move till mid-session. After which, the probability seems high that the Nifty resumes its upward movement.
From an extremely short term perspective, a nervous trader could have closed long, as the short term trendline has been violated. But a trader with a slightly longer term horizon could still have remained long. The previous swing low of 3115 has still not been violated. Possibly it could be tested tomorrow.
As of now, the Nifty remains a “buy on dip”. The projections from the 2600 low suggests that we may see the Nifty achieve the 3250 level.
At this point in time, there is nothing to suggest otherwise. We could change our mind when we see how the index behaves at the previous swing bottom.
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