08, JUNE
Nifty 2860.45
The trading pattern for the past few trading sessions suggests that Nifty is in the last leg of this correction. Now the possible range for the last leg to get completed is quite wide. In some cases, if the market is strong, it will not go below its previous low and here it should not go below 2896. But the low was violated yesterday.
In some cases, a new low will be formed within few points below the previous low. In this case, Nifty could form a bottom around 2850. Yesterday, it tested 2820 level. In some cases, the low is formed at double the length of the previous rally. Here the previous rally moved up 380 points and another 380 points fall below the low of 2896 is the maximum possible correction.
And also a contracting downside triangle is forming in the Nifty and in individual stocks. Contracting triangles break out sharply in either side according to the type.Here, the breadth of the triangle is 400 points. So, Nifty is likely to loose or gain atleast 400 points in a shorter period of time.
Technically the triangle seems to be bullish, simply because yesterday it did not go further down even after violating 2850 level. If it is about to break out in the downside, then it should do today in the morning itself. The initial indication of weakness comes if it trades below 2820 region. If not, Nifty is likely to move up.
However, it is better to wait and watch till a clear picture emerges from todays trading.
