Nifty gave a downside break!

Bottom Line: Nifty gave a directional break below 5135 - 5150 levels. The trend remains down for now!

Nifty Daily chart:

Wave Analysis:

Nifty gave a close below 5135 and thereby broke below the lower range of the channel. This is bearish over short term as prices have started trending and in downward direction. From wave perspective we think that we are probably in wave iii of C which can take prices towards 4900 levels. A triangle pattern break target comes around 4850 – 4900 levels.

Indian markets usually follow 76.4% retracement of previous move. This level comes to around 4920 levels. However the momentum looks to be increasing on downward direction and Indian markets can have selloff along with global markets.

In short, the trend remains down with ADX indicator moving on upside indicating that a trending move has probably started in the downward direction. Next support zone is at 4850 – 4920 levels and failure to hold support at these levels can open up further downside possibilities. However we will first wait to see how prices behave around 4900 levels. Only a close above 5180 will indicate positivity.