Earlier this evening I had a longish discussion with Viren on the state of our Nifty, especially after the high volume downbar visible in the afternoon.
At one point I felt that it would take out 5367, but later felt that it was a shake-out designed to catch weak hands. You can catch my real-time reaction to that move in the comments section of the last post.
Viren and I felt strongly that as long as price closed above 5367 our reference level for the Nifty as well as the US futures closed above 1083 levels, there was no need to push for any shorts.
Incidentally the US futures are currently at 1093 levels, after having bounced off 1084 which is the low thus far.
Here is the chart of the past two days of action in the Nifty Future :
Even though the move today was a high volume downmove, price still needs to confirm it the next day. In profile we always look at close v/s open for a relationship from one day to the next
The chart shows the swift move down from 5408 to 5384 matching the intensity of the move up from the same levels yesterday.The arrows show that the profile here is not developed or a low trade facilitation zone.
Ideally the market should auction between these two levels tomorrow in the first half before deciding what to do at 5308 which is to go up or come down.