Nifty at crucial Juncture!

Bottom Line: Nifty closed at important level and managed to defend the 5250 level. 1-2 days price action is very crucial!

Nifty Daily chart:

Nifty 60 mins chart:

 Nifty 20 mins chart:

Wave Analysis:

We mentioned in previous update, “We will now advise following an aggressive stop of 5250 on Nifty as move below it will also break the blue channel shown on 60 mins chart and we will be forced to adopt a bearish / neutral stand!”

Nifty had a gap down opening and made a low of 5258 on intraday basis. As shown on daily and hourly chart, prices have managed to close just above the channel we have been showing for more than a week. There was more deterioration seen in the Advanced Decline ratio and Smallcap &  Midcap indices underperformed the major index.

It is now extremely crucial to observe if Nifty manages to close above the 5250 level. Many of the stocks closed yesterday at crucial supports and selling pressure can intensify below 5250 which can then take index back towards the trading range of 5190.

Nifty 20 mins chart clearly shows that the decline is also very well channelized within red channel and there is a strong support coming in at 5250 – 5260 level from the extended trendline of previous consolidation.

In short, Nifty is now at make it or break it juncture. Weakness below 5250 can take prices towards 5190 levels and this will open up number of equally probable scenarios. Any move above 5330 will be positive and will indicate resumption of uptrend towards 5600 level.