As expected nifty positively with a gap up of about 100 points and also as we have indicated profit booking kicked in to utilize the global market induced strong opening. The initial downtrend was arrested around our first support level and nifty traded sideways for a while without breaching our first support level. In the second half of the session nifty breached our first support level which took it further down to close at the day’s low.
The US market closed very weak in view of resurfaced recession worries and most of the indices lost almost 5%. Asian markets also opened and trading very weak. In line with US and Asian markets nifty is expected to open very weak. Even a gap down of 100-150 points cannot be ruled out.
On the upper side nifty may find resistance near 3068 or 3165 levels. Similarly on the lower side support exists near 2898 or 2864 levels. Closing below 2949 may bring more weakness to the nifty. As we were repeatedly mentioned that nifty and other important index stocks have entered the overbought region which resulted in profit booking and this corrective move is expected to continue for at least couple of sessions.
Happy Trading !
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