Nifty took resistance exactly in the centre of our resistance band of 6180 - 6250 as mentioned in our previous post. Having touched a high of 6220+ Nifty fell 300 points in a matter of 4 days and made a low of 5930.
This in TA terms is known as 'Faster Retracement' and this can be an early warning sign & additional confirmation that Nifty has formed its major top at the recent 6220 high and started its journey on the way down. This could imply that Nifty has ended its 5th wave at the high of 6220 and we may have started the major C down. For additional confirmation that the 5th wave of corrective B wave has indeed ended Nifty has to break below 5930 & 5820 and give a faster retracement of the entire rally from 5500.
Nifty has retraced it's entire fall from 6220 to 5930 by round about the 61.8% mark and if 6130 is not crossed soon then we may witness another round of swift selling in which Nifty may target Faster Retracement of the entire rally from 5500. If so, that could mean we could witness some serious index selling and volatile days in the June contract.
Other factors supporting the bearish view on Nifty are :
1. India Vix consistently staying above the 200dma and showing early signs of a breakout.
2. Rupee depreciating rapidly and has broken below the all imp 56 level.
3. Global markets at all time highs and a correction can be witneessed soon as most of them have reached imp resistance zones and are highly overbought.
4. The recent selling in Nikkei coupled with record volumes ever has given a reason to be unnerved and be cautious.
Continue holding shorts in Nifty and even create fresh ones near 6100 with sl at 6160.
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