Nifty in Sharp Correction !!

With the sharp correction Nifty is racing downward and seems to be in a big hurry to reach its  target of 7700 which we had predicted  in our earlier posts when Nifty was at  8550 levels. However, we were wrong to predict that December would be a lackluster period for the markets.

http://eqtrend.blogspot.com/2014/12/nifty-update-on-daily-weekly-charts.html
http://eqtrend.blogspot.com/2014/11/nifty-touches-crucial-target-zone-8400.html
http://eqtrend.blogspot.com/2014/10/qe-nifty-update-elliott-wave-count.html

All significant supports have been broken as Nifty sliced through them effortlessly without any support coming in from FIIs who have turned out to be big sellers. The profit booking was already on the cards with Nifty running ahead of itself.

Technically,  Nifty should have reversed from 8400 and a rise from 8400 to 8600 was nothing but an opportunity to book profit at higher levels, book short positions and a  trap for those who predicted one way run of Nifty to 8800 -9000 levels.

 In our previous posts   we had clearly indicated the Nifty to be in the last leg of the up move as seen from the from the following TTO chart. In the following hourly chart, the hourly trend oscillator had fallen below the daily oscillator and had the effect of weakening the momentum. The highlighted area in the TTO indicator shows that momentum had started weakening from 8400 levels and all subsequent up moves were an exercise to book profits and creating short positions and traders should  have been careful with their positions. As the indices continue to be in oversold zone, traders should watch out before creating any fresh positions.

Begining of the much awaited Correction ??

Nifty has fallen below 8400 with short term charts showing some divergence with Nifty taking a breather. The indices need to rise above 8400 immediately, else the correction may continue into a full A-B- C correction as discussed in earlier post with target of 7700.

Nifty Update On Daily & Weekly Charts

Nifty has more or less attained most probable targets at 8600, but is still showing some strength as sentiments continue to remain bullish and people still don't forsee a trend reversal. This may result in a time correction if  levels of 8400 are held. If broken, we may see the begining of  A-B-C correction with Nifty touching the lower level of 7700.

The TTO trend oscillators of long, medium and short term continue to be above zero, which rules out any serious correction.

The RBI policy tomorrow will define the market direction from hereon till budget expectations set in. FII activities are likely to be lacklusture during December and we may see a rangebound market during the month.