16, May
Nifty 3502.95
Contrary to my expectation, Nifty continously moved below 3590 region and even violated the 3550 level which I have given as important for the Nifty to stay bullish.
Going by the price pattern, that unfolded below 3590 level shows that the uptrend in Nifty is still intact. Now, It seems that the present downside is correcting the previous rally from the panic low of 3340. Nifty rallied 430 points from the low. In this type of retracement, the correction can have a depth of 50 percent to 90 percent of the previous rally. This works out to 210 points to 390 points. With already Nifty down by 277 points, the downside potential seems very limited.
After the panic low of 3342 made on 28th of last month, Nifty consolidated around 3425 to 3450 region, and moved towards its all time high of 3777. So, the possibility of Nifty bouncing from 3425 – 3450 levels is very high. Nifty could swing between 3530 and 3450 region for another two trading sessions before moving above 3570 region.
A move above 3570 would confirm the bottom, and in coming trading sessions, If Nifty behaves in expected lines, it could move towards it previous high of 3777 in few trading sessions.
Yesterday’s downmove doesn’t alter My previous view of Nifty forming a big base for a strong rally towards 4200.
