Here's one chart that gives a small hint where the floor might be -
If History is any guide, The FLOOR might be at 200-week moving average. The bad news: the 200-week ma right now is at 7420
As you can see in the chart above - Nifty has always found strong support at 200-week moving average during times of extreme stress (2013: Fed taper tantrum; 2016 Jan: Global Chaos). This time might be no different and hence one cannot rule out strong buying to emerge around that level.
Here's the Bad News: When dip buyers know that they can buy at such low levels, the buying dries up at higher levels and even marginal selling can take the market to that level.
The Charts do not tell what market will do. It only tells us about the possibilities. Nobody knows what market will do. All we can do is look at the chart and make a guess on what market participants might do. At this point of time - charts suggest that dip buyers might take WAIT approach
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