Nov 22nd is the first day in the last ten days
where we haven’t seen a new low. That itself looks like a big achievement.
Market took a breather from the relentless selling. This pause in down trend came
even though US markets close down by 2.5% on Nov 21st. Also,
yesterday market’s intraday low was 5764.
NIFTY
|
||||
Date
|
OPEN
|
HIGH
|
LOW
|
CLOSE
|
21-Nov
|
4873
|
4873
|
4764.8
|
4778
|
22-Nov
|
4794
|
4854
|
4782
|
4812
|
When market touched
intraday high of 4854 yesterday, it looked as if market is ready for the sharp (V-shaped)
reversal. But market couldn’t sustain the momentum. However, market may still
go up in the near term for following reasons.
·
Short covering. This week being the expiry week,
bears who are sitting on profit would start booking the profit which could lead
to short covering rally.
·
Oversold conditions. Oscillators such as
stochastics are in the oversold zone.
·
Market is close to the previous support level of
4700 -4750. This level got tested four times in the last 12 months. So, it can
be considered as a strong support zone. So, we can hope market will defend this
support zone.
How do we know market is headed in the upward direction?
First, market should see a higher high – it should go above
4873 during intraday trade and stay above 4782. Then we can consider that it
started upward trajectory. If the market goes below last two days low of 4764,
then we can conclude that the short term trend will continue for few more days.
However, the key level to watch out for is 4700. If NIFTY breaches 4700 then
run for the cover.
