Last week Nifty closed a huge 316 points lower. This has been a major weekly loss and opens the gates for further downside. In past, Nifty has taken support @ 5225 (10 Feb Intraday low 5196), 5262 (26 Feb Intraday low 5242), 5257 (20 Jun intraday low 5195). On Friday 5 Aug 11, Nifty closed 5211 with an intraday bounce from a low of 5116. This clearly shows that 5200 is a proved support. But unlike previous occasions when Nifty bounced back, this time the probability of as strong a bounce back looks remote. Nifty has been losing strength and is weakest since Nov 10.
Expect some horizontal movement here or even a small bounce back. But Nifty faces high resistance @ 5280/5350/5390. I do not see much possibility of Nifty closing above 5400 in near future. Any bounce must be treated as a technical rally and long positions - even in delivery stocks must be exited. This could be your last chance to get out of this market at respectable levels.
On lower side Nifty hardly has any supports. Consistent closes below 5200 with take nifty to levels of 4950/4920 immediately.
With the correction deepening, on lower side following Nifty levels are very much a possibility, in case the world markets follow suit -
4920/4825/4700/4540 in the coming months.
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