#MarketUpdate - Bang Bang . . But is the worst over.. ? ? ?

Hey all,

After a sudden sell off at the opening itself, Nifty hit its 4th ever down circuit of 10% and was halted for 45 minutes. That 10 minute slaughter took Nifty to 8600 levels. Even after re-opening, it traded a bit in the negative territory, and created a low near 8550.

And then, as we checked yesterday, bounced back sharply from there to trade near 10k levels now. This, I guess is the biggest intraday pullback I ever saw in my market in past 16 years. 

A pull back of close to 1600 points from the lows of 8555 to the high of 10160.. Which is a roaring 18.7% jump ! ! !

Now, as suggested in my other post of yesterday in What To Do?, if any one has purchased anything on today or yesterday, would already be profit mostly, so enjoy and keep on holding for great returns.

A common question now would be why the markets pulled back so much.... And my answer is common... Buy the Rumour Sell the fact...

It is heard that the Finance Minister is likely to address the media at 3:00 PM now, and market grapevine suggests there could be announcement regarding the Yes Bank bailout package or / and probable fiscal stimulus (similar to what US did last night)..... 

As per me, prices are discounting these facts currently, and post a positive announcement (IF ANY), it might stabilize a bit. Notably, the VIX (Volatility index) had rallied up to almost 59%, which is even higher than the 2008 crisis, and surely, it needs to cool down...

On the higher side, the first resistance for Nifty would be near a big downward gap of 10040 to 10340, after pulling back sharply towards 10150, it has now corrected a but and is trading near 9980

Personal view - 

The way bulls have managed to come back in a style, today's low would be very crucial markets to decide the course of action for upcoming months / years. However, any further upside can only be possible if markets take out this high of 10160...

Also, based on the wave counts I reckoned, after rallying for a while, or consolidating till the resistances (if surpasses 10160...) near 10350-10500-10750-10840, I feel Nifty can still, potentially go down, and even lower than 8500... Time would only answer this eventually.

Also owing to the highest volatility, remember to trade with strict stops and targets.

Plan of actions for investors, please keep adding quality stocks with every 5 or 10% corrections.

For traders, the immediate term bias remains bullish, unless Nifty holds the recent lows...

Let us wait and watch for a trade set up, if it unfolds on the charts...

Till then...

Cheers

Hrishi.. 

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