Today, if Nifty stays above 2850 level and if it once again moves above 2950, then Nifty is likely to test 3050-3100 level shortly, from where a minor correction can be expected. A move above 2950 would confirm the bottom at 2595. Instead, if the level 2850 is violated, then it is likely to test 2750 region.
Previously it was mentioned that Nifty was in the last leg of this correction and in the worst case it could test 2500 level and also it was mentioned the Nifty would bounce back around 2500 levels and in the upside it could test 3100 levels in coming trading sessions.
Nifty has corrected more than 1000 points in a short span of time. These type of corrections usually occur during bull market where some upside moves are running corrections. Only running corrections would be corrected in the downside in a short span of time. Once the correction is over, it would resume its bull trend.
The post correction scenario has two possibilities. One possibility is, Nifty likely to move towards its all time high in a slow manner and if this is the case, then it may take 6 months to 1 year to cross the all time high. The other view is, Nifty is likely to move towards its previous high without any major downside correction and in this case, Nifty is likely to cross the all time high before the month of August 2006. If Market moves in expected lines, then once again we are likely to see a strong bull market in coming months.
If correction terminates within 2500 level, the uptrend in Market will be still intact. Correction extending beyond this level is highly suspectable and then we have to rework the long term charts and also recovery will take months. Investors can re-enter the market with keeping 2300 as broad stoploss in the long term.