Nifty opened positive by taking cues from the US market. During the day nifty formed double top at the day’s high of 2772 which attracted the long position holders to liquidate their positions and also invited fresh shorts which had eventually brought the nifty towards the day’s low without looking back. Nifty closed at 2635 which is closer to our mentioned critical support level of 2642.
There was a massive sell off in the US market which has resulted in the loss of around 5-7% in their indices. Asian markets also have opened and trading weak in negative region. Expect nifty also to open weak, possibly with a mild gap down. Intraday surprises can be anticipated for the day.
On the upper side nifty may find resistance near 2675 or 2732 levels. Similarly on the lower side support exists near 2578 or 2521 levels. In worst case scenario nifty should take support near 2486 level which is a critical Fibonacci support level and breaching of which can easily take nifty towards the October low. As we are repeatedly indicating that the indices have entered oversold region, nifty may give a surprise pull back anytime.
Happy Trading !
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