These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.
The Nifty chart clearly shows the upside breakout of the short term downtrend. As has been suggested all along, we could have been buying on dips. Today, the Nifty has achieved its short term objective of 3250+. Also the Sensex has almost achieved the Fibonacci retracement level of 11195. No doubt both the indices have reached their price objectives. It also leads me to believe that there could be a temporary halt here.
Further, normally, whenever there is an upside breakout, the prices tend to slip down on profit booking. This profit booking allows the price to test the breakout levels. If the breakout levels hold, then we could expect the longer term trend to continue up. Therefore, we may see some sort of downside correction from here.
But again, we have to step back a little and observe the woods, and not the trees.
The intermediate trend is still positive, and a downside correction, if any, would only be in the nature of the bears testing the waters.
As has always been maintained since the last six weeks, the patient traders can make money provided they time the market in their buying.
In conclusion, wait for buying opportunities, rather than rush in.
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