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.On Friday, 23 Feb, the market did something quite unexpected. Instead of stopping at the support, it tanked further. And what a fall it was. It sliced through one support, and stopped at another. As can very clearly be seen on the chart, the short term trend is down. It can also be seen that the market is near another support.
Normally, in such a situation, after such a fall, the market opens with a gap. Either upside or downside.
The average reader would immediately say, … ahh … here is a perfectly hedged statement. The idea of saying this is not prompted by my desire to keep my reputation as an analyst intact. It’s only a desire to allow readers to be prepared for Monday, and formulate a trading plan, and implement it. Read on …
In case the market opens with a downside gap, it will trigger more stops of bulls, and in case it opens to the upside, smaller players would think that the downside is over and try and buy furiously. It is also a normal occurrence that these panic actions on the opening bell are normally wrong. Therefore, it is suggested not to jump in at the opening. Allow the market to simmer for about an hour, and then only enter into fresh trades.
By that time, we will have a fair idea of the future direction of the market.
As of now, the long term trend is still up. The short term is down. Now it may be expected that the market achieves a short term objective of 3900. From there it could possibly retrace a substantial portion of the 180 odd points fall and rise a 100 odd points. We could then see fresh bear action and also profit booking. Which would only confirm that the short term trend is down.
The projected level of this fall could last till 3800, and then we would evaluate the next course of action. Short term players could utilise any rise to exit losing positions.
4 comments:
Tks sirji ! so abt 100 pts from 3940 levels ??
reg
ketan
Yes Ketan. low of today is 3856 and retraced all the fall of today . As per my calculations the total down move is now 324 points from high of 4180 to 3856 .So the next levels to watch out are 3980 ,4020 and 4060 which are 38.2 , 50 and 61.2 retracements of total down move .
Am I correct Dusantji ?
This is the real beauty of TA . The above numbers i mentioned are already on Dusantjis Chart marked yellow and purple The earliuer supports become resistance now .
And see the Red dotted line at 3850 levels .and nifty obeyed that prefectly
So where ever you go ,TA follows :)
Hello Naresh,
Please see my analysis of today for the anticipated level of upward move.
Dusant
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