12, JUNE
Nifty 2866.30
Today, if Nifty moves above 2920 level and if it sustains above this level, then Nifty is likely to move towards 3100 region in few trading sessions, or if it fails to clear 2920 region, then it would turn weak. If the low 2683 is violated, then Nifty would lose another 150 points.
Nifty has corrected more than 1000 points in a short span of time. These type of corrections usually occur during bull market where corrections are of running in nature. Only running corrections would be corrected in the downside in a short span of time. Once the correction is over, the market is likely to develop a upside running triangle whose tip would fall outside the previous all time high. If this is the case, then once again we are likely to see a strong bull market in coming months for Indian Stock Market.
For the past few days, I have been mentioning that the trading pattern for the past few trading sessions suggested that Nifty was in the last leg of this correction and the possible range for the last leg to get completed was quite wide.
The last possible scenario is being that Nifty could bottom out around double the length of the previous rally in the downside. Here Nifty moved up 380 points. So, Nifty is likely to bottom out around 380 points below 2896 and it works out to 2516.
The previous intermediate top of Nifty was 2668.85 and it formed on 5th of October 2005. And also downside correction normally terminate around previous tops. So, a bottom might have already formed at 2683 or it is likely to bottom out around 2516 region.
If correction terminates within the levels I have mentioned, the uptrend in Market will be still intact. Correction extending beyond this level is highly suspectable and then we have to rework the long term charts and also recovery will take months.
