Since March 2015, Nifty has been drifting in a downward sloping channel as part of a complex correction. The channel has its upper an lower level placed at 7950 and 7100 respectively. Nifty has, twice earlier touched the lower trend line and bounced back.
The present fall, however pierced the lower line, touching a low of 6869, which is the breakout gap formed during May 2014. With the gap filled, Nifty now needs to get back into the channel and stay above 7100.
 |
| Nifty Weekly |
Having made an attempt to get inside the channel, Nifty has again fallen below it, a fall which does not augurs well for the long term charts and opens up further bearish possibilities. The present fall has further deteriorated the advance indicators on the Triple Trend Oscillator with the TO showing accelerated downward momentum as against the previously developing divergence on monthly chart.
 |
| Nifty Monthly |
Indian markets have a history of corrections lasting from 12 to 14 months of which we are nearing 12 months in the present corrections. With a 24% correction from the top already, will it be a repeat of 2008??
A failure of Nifty to crawl back into the channel and trade above 7100 immediately may open further downside to 6100 levels. The current macro-economic environment, both domestic and international are pointers to a bearish 2016.
With the union budget a few days away, there are no signs of a pre-budget rally, the international events may be the only drivers for Indian markets in 2016.
