#MarketUpdate - CAUTION, Diversion Ahead.... Fool's Day fooling ???

Hi All,

First of all, wish you a very Happy New Financial Year 2019-20.... :)

Surprisingly, the falling window could not do its magic and Nifty, after taking support near the first support zone mentioned near 10300-310, closed handsomely above the downward gap near 10435-40. And after that there was no look back for Bulls as they took Nifty towards almost a 9 month high, not the life time though...

However, Sensex today crossed 39k mark for the first time ever and surpassed its earlier Life high of 38989.65 and created a new high near 39115.57.

Now, this raises serious concerns for bulls

Firstly, Sensex is the only index which created a life high, and all other major indices, i.e. Nifty, Mid cap, Small cap, etc did not surpass their respective highs. This phenomenon is called as a kind of Inter market (index) divergence which can prove to be very alarming. The only issue is this can continue for a period of time and taking a trade just based on this may not be a good idea...

However, importantly, Nifty which was up by almost a % (115 points), gave more than half of its gains and closed up by just 45 points, and in this bargain, both Nifty and Sensex both have created a Bearish pattern which looks similar to the Shooting Star / Gravestone Doji.

In a nutshell, today's low for the indices would be crucial to watch out for.

Hence very Important support for Nifty would be near 10560-10630, sustaining below which, can mean a down move to the lower supports near 10520-11470-11400-11300.....

However, though it's quit difficult for Mid and small call indices, but even if Nifty manages to surpass the previous high of 11760 levels, we can then say that the divergence didn't work and it may continue its northward journey.

So, the big question is, are the Bears fooling us on Fools day?

I feel, 10400-10300 levels are very crucial for bulls.....

Let the time decide, wait and watch for the aforesaid levels...

Cheers....

Hrishi