Nifty at crucial channel support!

Nifty Daily chart:

Nifty 60 mins chart:

We have been very accurate in cautioning our readers about the current uptrend. We mentioned in our previous report that we are in matured state of trend and prices might rally a bit and then start correcting. We had a big down move on Friday as soon as 5370 was broken and Nifty closed on that level (5380 after average). Also as seen from 60 mins chart, prices closed on the red channel which is acting as a very crucial support line for the entire up trend since 4685.

Prices re-entered the triangle after breakout thereby warning that the downward correction has started. Next 2 days are very crucial which will tell us if we are correcting in the form of sideways action or a zigzag formation (steeper) correction. Break of 5325 will increase the selling pressure and we can then correct to as much as 5050. We also have a strong negative divergence with respect to RSI.

Time wise February is going to be difficult from trading after good trending move in January. Also corrections usually take more time than impulsive moves and so please keep lower exposures in either direction as corrections can get very complex.

In short, our bias is now negative as long as 5425 is not broken on the upside. A break below 5325 will increase selling pressure else we can move in sideways correction this week.