Since the breakout of triangle on the downside, NIFTY is giving more and more bearish signals on the way to downside. We could see that on the chart that we got to “Bearish Engulfing” signs which is a bearish signal. But today we have seen a “hammer” which is a sign that markets MAY change the course from here. All the indicators are already in oversold zone but we cannot take that signal as the bullish sign as markets can stay in oversold zone for even months.
On weekly chart too we have seen some bearish breakout last week. We could see that there are two valid channels. NIFTY has confirmed the bearish breakout from sub-channel last week while this week it has not been able to move up that level of 4936.
Considering Technically factors we are more biased on bears side, where as fundamentally also we have not got any sign of turn around from here. Rupee is at the life time low at 56.20 which is a negative sign for our markets.
Strategy: Still Hold your SHORTS initiated at 5170. Book profit on upside if NIFTY closes above 4936 on weekly basis. Add more shorts if NIFTY closed below 4785 on daily basis.