Nifty Daily

Nifty came to the lower end of the range. 8728-8713 is the support range from the trendlines, and the 20dma at 8646 is the final pivot. The recent correction in stocks appears harsh but if the support holds we must keep open the potential for a move up to 8940. Daily momentum indicators remain in sell mode because the index has not moved much in over a week so levels need to be watched. Holding 8700 we should start the next move up right away. Note as the first alternate we are trying to complete a 3 wave rise to complete a triangle in wave E up. A break of 8700 would mean three waves are mostly over and the triangle complete and the risk of going back to 8200. Holding 8700 we should push to 8940 before deciding on the future trend from there.

Nifty made a low of 8712 near the previous swing low and the lower end of the broader channel. A parallel line of the highs can be made to draw a horizontal channel and we are at the lower end of that too. So below 8700 we may dip to 8646 and will have to consider the risk of a trend reversal. Else the next move up should start from here itself.

The swing dropped sharply to 18. Readings near 20 have involved many bottoms during the last year so in that sense we are oversold. During panics we do go below the 10 mark as well. But so far I would think this is a normal correction and should be done here. A reversal in the breadth should confirm this tomorrow.

Bank nifty also kissed the lower end of the channel near 20200. Holding this support the next move up should resume. 20600 remains an important resistance as it is the trendline of the highs from 2015. Failure would make the entire pattern from 2015 convert itself into a triangle. A breakout would open up more bullish alternates. This is a critical juncture.