Nifty opened with an upside gap and tested 8800 mark in the early trade. But thereafter it started lower tops and lower bottoms on the intraday chart. In the afternoon session, it fell sharply and broke 8700 and 8600 mark and made a low of 8558, finally it ended at 8591 with a loss of 2.72%. The Advance Decline ratio was almost 1:12.
Yesterday, this is first time since February 2016, Nifty has given close below its 200DEMA, which is placed at 8651. On the monthly chart Nifty is making “Bearish Engulfing” pattern and oscillators are showing negative crossover. Now Nifty is ready for a correction, it can test its 200DEMA, which is placed at 8234 and below that it can even test 8150, which is 38.20% retracement level of its entire rally from 6825 to 8968. On the upside the range of 8700 to 8800 will play as a strong resistance now.