Nifty crashed a whopping 490 point in sync with the global meltdown which was triggered by the recent Yuan devaluation.
The charts were hinting at weakness but the force with which market came crashing down came as a surprise, and perhaps a bit overdone in the Indian context where the other European markets have fallen only 2.5% -3% as against Nifty which fell almost 6% today. In four trading sessions Nifty has fallen 700 points from 8500 to 7800 based just on the global factors. All support levels were broken as Nifty sliced through them to end at the lowest point of the day.
We had in our earlier posts indicated Nifty correcting to retest the previous lows and further downside.
Nifty to Retest Recent Lows
Is Nifty Headed for 7500 ?"
How did Triple Trend Oscillator anticipate the present correction ??
A view of the recent weekly chart and TTO will explain the present fall.In the chart below, the medium term trend turned down during the first fall in August ( Orange circle) which weakened the long term trend ( still above zero) but the pullback was not strong enough to repair the damage from the fall. Nifty failed to sustain above 8500 levels in the pullback indicating that the indices was preparing for further fall.
The long TO fell below zero and with the weakening medium TO a Synchronized Bearish Alignment was in place (Yellow circle). With all the three TO falling below zero in a bearish pattern, Nifty witnessed one of the biggest falls in recent months. With an integrated analysis of multiple trends, TTO hinted at a major trend reversal much in advance.
