Nifty has moved below its 50 day moving averages after 45 days in last session and closed at 5574. Just two week before it was making 52 week high and in just two week it is trading at 2 months low level. Nifty is trending down since five days, in other words nifty is daily closing at a lower price than its previous days close. As per slow stochastic on nifty daily chart, it has placed in oversold zone and stochastic may reverse upside any time.
As you are seeing in the chart below that nifty is near its long term trend line support around 5545. If this trend line work for nifty in coming session then we may see a 5th wave up move till 5950-5600. Still I think that a rally till 5950 is due in our market, otherwise i will have to give a another alternative count.
Fii sold 27543 contracts worth rs 725 cores and open interest decreased by 11%. As nifty future was down by 68 points and open interest decreased by 11% indicating that long has been covered.
But I don't see any panic like situation in current market even though all U.S and European market is in frequently down trend. Fiis bought 509 cores in cash market segment. Nifty 5500 put is standing with highest open interest at 70,70,300 contracts indicating that 5500 level will give support nifty in next session and 5500 call added fresh 15,10,850 contracts in open interest. Fiis bought index option worth rs 1400 cores and addition in open interest 5500 call seems that fiis have bought option (5500 CE) in dip.
Nifty is at crucial juncture and trend line will decide the trend of nifty. If holds next wave may take nifty upto 5959-6000.
GOOD LUCK
