Nifty today went up 1.8% with very strong breadth and we have strong dollar volume as well. But in last 5 days we have heavy negative breadth than positive breadth. This can be a short reversal move. Until we see Nifty crossing above yesterdays high, we should not be taking much risk in either side. If this is really a strong positive demand, we should be another high positive breadth day tomorrow which should push entire market up. But if this is just a shock reversal, we should see closing in the same range but Nifty can make little lower low tomorrow.
Yesterday, Nifty touched Fibonancci 38.2% retracement of this years gain, which usually serves as a strong resistance zone and reversal from this area is expected.
Overbought-oversold ratio lost yesterdays all negative move and if we have one positive day, it will turned into positive zone that may start another bull move and we should be looking for long positions then.
Market is in very volatile condition so one has to be very careful how they trade. The blog readers who took the shorting trade in last 4 days have made good money now its time to relax and watch the market.
I will be surprised if market will just go up from here in day or two as we have major selling behind us. But again nobody can predict the market.
I will be waiting to see tomorrows market action and then will decide on the possible trade.
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