Bulls took a severe beating this week - as expected and posted in our earlier commentaries - and Nifty broke the channel and sold off. This channel was running since June,2012. Breaking of this channel initiated the sell off what we seen last couple of days,but on a longer term perspective,8 month old channel is not too significant. Short term momentum oscillators are already oversold,but they can remain so for a long period of time. More important is that Nifty future is close to strong support zone (5650-5700 ).. Please see the chart above for reference.
Its quite possible for Nifty to take support at this zone and consolidate.. Why we are saying this is because of longer term charts are still in Bullish mode..
But we will definitely revise our above outlook if 5650-5700 area also falls.
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