Don't expect a rally anytime soon
Although the market has done 4-5% of correction from its highs, this doesn't look like one of those situations where it is an opportunity for more buying. Let's have a closer look of Nifty 50 to analyze the current market situation.
Looking at the daily chart, the drop on 5th Aug lead to breakout of 3 SPLs. Since then this is doing a retest of the SPLs. Going by neoclassical method, there is high probability that this will regenerate downside and extend further till it finds a decent support (which happens to be another 3% down near 23,400 area). We cannot refute this thesis until and unless price fails the SPL tests (going above 24,582).
But this, by any stretch, doesn't mean beginning of a downtrend. Looking at the bigger picture, the uptrend looks quite strong. We can only expect a shift in trend if price breaks below 21130, that is a down move of around 15%, which shouldn't be happening anytime soon.
In conclusion, if you are looking to buy new positions, it is better to wait for price to either find a good support at 23400 or wait for the SPL tests to fail.
Although the market has done 4-5% of correction from its highs, this doesn't look like one of those situations where it is an opportunity for more buying. Let's have a closer look of Nifty 50 to analyze the current market situation.
Looking at the daily chart, the drop on 5th Aug lead to breakout of 3 SPLs. Since then this is doing a retest of the SPLs. Going by neoclassical method, there is high probability that this will regenerate downside and extend further till it finds a decent support (which happens to be another 3% down near 23,400 area). We cannot refute this thesis until and unless price fails the SPL tests (going above 24,582).
But this, by any stretch, doesn't mean beginning of a downtrend. Looking at the bigger picture, the uptrend looks quite strong. We can only expect a shift in trend if price breaks below 21130, that is a down move of around 15%, which shouldn't be happening anytime soon.
In conclusion, if you are looking to buy new positions, it is better to wait for price to either find a good support at 23400 or wait for the SPL tests to fail.
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