Yesterday Nifty cracked below 200 dma and there was apprehension and concern on what might happen next: A false breakdown or case of falling knife? Today's Nifty bounce has not changed anything yet for short term traders. But today's Nifty up move has been source of comfort for medium term investors. This is what Nifty did today
For medium term investors - Nifty is still buy on dips. Reason: Nifty held support of 50 week moving average. Remember, for medium to longer term traders/investors: weekly chart is all that matters.
Here's Nifty weekly chart
As long as Nifty trades above 8170, there is nothing to worry over medium term, and market has potential to undo the technical damage it has done in recent past. Keep an eye on 8170 on the downside and HOPE for rally back to 9000. Will that happen? Well only time will tell
The biggest problem in charting is wishful thinking. Analysts often convince themselves that a pattern is bullish or bearish depending on whether they want to buy or to sell
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers