Nifty Update

In our previous update we mentioned 6080 & 6120 as the important levels. Nifty now having broken above 6120 has shot up vertically and reached almost near 6200, a mere 100+
points away from the all important previous top of  6339.

The chart above shows that Nifty has entered its most crucial zone.


The band of 6180 - 6250 is the last overhead Multiple Trendline Resistance Zone for Nifty. To keep the bearish possibility alive, Nifty HAS TO reverse from this zone. As per EW theory, we are in the last and final leg, the 5th wave of the corrective (C) post which the major C down should start.

It would not be prudent to be long  in a scenario where Nifty is near a Major Potential Reversal Zone coupled with a rising Vix which is sustaining above its 200 DMA which indicates underlying bullishness in Vix (CAUTION ADVISED). That in itself does not warrant a reason to short but its better to cut out longs or stay hedged.

Another note of caution would be on the rest of the world markets which have been rallying relentlessly to new highs. Atleast some correction / retracement is warranted and may come anytime soon. Its important to note that DJIA has reached a major resistance zone of 15200 -15400 band and any further upside would be very limited and this band can be a reversal zone for the DJIA which will set in some serious corrections.

If Nifty does not manage to cross this resistance band soon and shows any sign of weakness/ top formation near such important levels then one may take short positions in Nifty.