Nifty has fallen almost 200 points when it broke its crucial support of 5180/5200. Now the question is where is the next support for Nifty??. The answer is It is placed at around 4950 and there are two reasons to defend my point of view:
1) 61.8% retracement level of the entire rally from 4675 to 5400 is placed at around 4950.
2) 200 day moving average which is seen as a good support is also placed at 4960.
Till we dont close below 4950 on a sustained basis we can see a bounce back till 5070/5125 in coming days. So people are requested to cut their short positions in the range of 4950-4970 and some long positions can also be created.
FTSE View:
The FTSE Index has fallen 700 points from the top ( 5800 to 5100 ) and is looking oversold if you look at Relative Strength Index which is going below to 20 to touch its historic lows. Major Support for FTSE id in the zone of 5000-5100. If you see at the expanding triangle the base line will provide strong support at the above levels.. So considering these 2 points a bounce back is definitely not ruled out and may happen anytime in next few days.
DAX View:
The DAX Index has also fallen almost 600 points from the top ( 6300 to 5700 ) and is looking oversold if you look at Relative Strength Index which is going below to 30 to touch its historic lows. Major Support for DAX id in the zone of 5600-5700. If you see at the almost parallel channel being formed on the charts, there is a strong support at 5600-5700 ( green line ) where the lower end of the channel is placed. So considering these 2 points a bounce back is definitely not ruled out and may happen anytime in next few days.
Stock view: Cipla
Looking at this Cipla's chart, a very beautiful inverted Head & Shoulder pattern is observed and it has taken almost 5 months to complete this formation. Cipla just needs to overcome some resistances near 355-360. Buy Cipla if it sustains above 357-360 band or closes above 360 for short term targets of 385/390/410.
Have a nice trading day
Regards
Ankit
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