Today,if Nifty moves above 2950 region and sustains above this level, then it is likely to test 3050-3100 levels shortly. On the other hand, if it fails to clear 2950 region and moves below 2850 level, then it is likely to test 2750 region. The stop for the longs is 2850.
For the past few weeks, I have been mentioning that the maximum possible downside potential is limited to 2500 level for Nifty. If market doesn’t violate this level here after, the long term bullish trend will remain intact. Correction extending beyond this level is highly suspectable and we have to rework the long term charts.
Now, if Nifty moves above 2950 and sustains above that level, then we can confirm the bottom at 2595. Instead, if there is going to be a correction for the recent rally from the low of 2595, then Nifty should not violate 2595 level to confirm the bottom.
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.