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Nifty

Nifty commenced its event heavy week on a negative note as it slipped below its 5 DEMA support level of 18670 but recoveredwell toclose above marginally above the same. Its trend strength indicators again displayed diverging signals as RSI declined fromits overbought reading above 75 towards 67 while ADX holding above its 25 mark. Slippages below the same could be a confirmatorysignof loss in strength in the index.Immediate support for the index during the week stands at 18670 (5 DEMA) belowwhichtheindexcouldslip towards the crucial trend defining support level of 18360 below which momentum longs as well as positional longs shouldbeexited.As observed on its daily scale the ongoing bullish wave from the base of 16747.70 (30th September) can be easily definedas aclassic5-Wave bullish structure with its termination zone placed around 18810 to 19015. We have already witnessed last Thursdays expiryclosingat 18812 with its RSI reading above its 75-level confirming its overbought state. But a reversal candlestick formation signal shouldbenecessary to conclude its termination. Hence building fresh longs should be avoided at this juncture & a pullback shouldbewaitedforfresh assessment of the immediate trend.Short term traders should remain cautious as a strong evidence of a bearish reversal formationis mandatory to confirm the termination upto 19130-19400 zone; until then retain long shorts positions throughout the week

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