Nifty(4693.15) Markets staged big rally of 3.2% from the important support of 4530. Remember, one day does not make a trend and sustainability and follow through are hall marks of a trend. Shanghai composite has hit yet another new 52 week low this morning. Let us see how long the window dressing for Nifty lasts. If Nifty heads below 4600, yesterday’s low, it will be clear indication of a shallow correction having come to an end.
Before we get too aggressive on the short side, we would like to see additional clues for the short term. However, the medium term trend is strongly down. Resistance(marked in yellow) 4810-4840 is going to be formidable in the event Nifty manages to conquer 4730. Support is at 4530 and a breach of this would signal a move to 4380.
Open position: Short Indusind @267 (partial profits taken)