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Observation:

After showing a sustainable upmove over the last few weeks, Nifty consolidation movement on Friday, Nifty witnessed sharp weakness on Monday and closed the day lower by 368 points. A long bear candle was formed on the daily chart with gap down opening. Technically, this pattern is indicating a bearish evening star type candle patternnot a classical one. The positive chart pattern like higher tops and bottoms is intact on the daily chart and Nifty is currently in the process of forming new higher bottom of the sequence. Still there is no confirmation of any bottom reversal pattern at the lows. After the formation of three long candles consecutively on the weekly chart, Nifty has started to react down at the beginning of the week. Previously, the Nifty has bounced back after one week of dips in the past.

Conclusion:

The short term trend of Nifty seems to have turned down. But the long term story of the market remains intact. Present weakness could be an opportunity to buy on dips. We expect Nifty to find support around 25500- 25400 levels. One needs to keep SL at 25200. A decisive move above the immediate resistance of 26000 levels could bring bulls back into action. The next medium term upside targets to be watched around 26800 for the coming 1-2 months.

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