Finally after 4 days of rangebound trading we have decided to breakdown as all the world markets closed or are trading 2-3 % down. 4650-4550 are now the levels to watch out for due to the following reasons:
1) 200 DMA which is a long term support lies in this range,
2) 4540 was the low made in month of October and that will act as a great support
3) 640 points was the fall in the month of October and then we bounced back sharply.
October 5180-4540 = 640
February 5300-640= 4660
So the level comes out to be around 4650.
But Just remember if we close below 4400-4500 on a weekly/monthly basis then the long term trend of Nifty could be in question. If anything of this sort happens then we can see follow up correction of 10-15% in the index.
Its time for long term investors to step in and start investing in a pyramid manner. How to invest in a pyramid manner?. Look previous posts on the blog.
Have a nice trading day
Regards
Ankit
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