Nifty did recover from day's low, but it is not out of woods yet

Nifty posted a handsome recovery from the lows of 11800, and closed 73 points above, this recovery came after a 220 points fall, on an options settlement day and with a negative advance decline ratio.

RSI and some other indicators / oscillators are still strong on daily charts but comparatively weak on shorter period charts. This generally means "weakness setting in".

Nifty is still out of the channel, it has breached on the downside.

Our EMA and RSI combination is yet to turn into BUY on either daily or two hour charts, though with recovery from lows, RSI line has come very close to the EMA.

Two hour chart shows formation of lower tops and bottoms.

I would advise, staying put for some time in the morning. Allow Nifty some time to cool off after the action packed options settlement.

Initiate longs only after 11912 is breached convincingly and this level is sustained for some time. Targets on the upside can be 11946 - 11980.

Also shorts can be created if it breaches 11840 and stays below for some time. The downside targets are 11802 - 11780 - 11700.


"Puneet_9EMA_21_RSI"* is a simple and reliable indicator, many of us have been using it for a few months as it has given some reliable "Enter" and "Exit" signals, all very close to the tops and bottom.

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This post is not an advice to speculate using leveraged products, one must thoroughly understand the financial implications, consult some financial adviser before taking any positions.
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