The selling spree in the world indices didn’t spare Nifty today. The selling was evident right from the opening bell when Nifty gapped down and not even for a single moment during the showed any strength or mood to revive. Lets have a look at the charts and see what they say about the Index in the upcoming sessions.
The daily chart of Nifty is in uptrend, a single day event does not indicate the trend change or wrapping up of the on going trend. The momentum is very strong as of now. The Long term trend indicator (blue histogram) is still positive and depicts that today’s action has not done enough damage to change the trend. The short term histogram (red) has turned negative, indicates a correction not a change! So we can safely hold on to the longs and should not panic sell at this point. Till Nifty trades above 9300, the damage to the on going trend is not possible.
Now, lets move down to the hourly charts, the index is moving near a important support level, the gap and an important pivot. The volume on the last bar seems to be exhaustion volume, that implies that last selling is taking place, and the bulls may be back into action in a session or two. The momentum is at an important juncture. Any move above the last candle will fizz out bears and fuel bulls again to take Nifty to new highs.
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