Dated :- 03.04. 2016                                 NIFTY SPOT : 7713.05

Hi,

Readers,

Nifty moved as expected and as was mentioned in my previous blog.

As expected Nifty corrected on Monday and made a low of 7582 thereby giving readers the opportunity to make profits.

But due to Yellen speech Nifty again came back to close at par virtually at previous week closing of 7716.

Now What :-

Now Nifty has taken a small correction and is now in counter rebound move.

Chartically this is very important time. As Nifty is standing at same levels where it was last week, after cutting short the correction (as it has again came back from 7582 only). Which indicates that it may have the power to move up some more points also. I call them counter rebounds. One should not ignore them. Till the time these counter rebounds does not loose their steam one should not try to sell, they have the tendency to surprise by their sharp moves.

Now, the chart are giving signals that, if, Nifty does not fall immediately then it has the power to move up to even 7880+ levels also.

The Question which should come in mind is that, when one should assume that Nifty is willing to fall immediately. For that 7668 is important level, Decisive close below this level for two consecutive days will indicate that Nifty is willing to fall immediately. And this breakdown will be further confirmed on break below 7582. For this trade stop loss should be very tight i.e. 7723 closing basis.

 If Nifty does this then the counter rebound is over and lower levels are coming. Otherwise Nifty can further climb 100-150 points.

But remember that if counter rebound has saved the Nifty to fall for once. The fall is imminent and it will come with more force second time. Thus if Nifty moves up then play the up move with very tight stop loss of 7668 closing basis. And donot be over bullish.

In Nut shell :- Now 7668 closing basis will be very important. Till Nifty is above that bias should be positive and once it closes below 7668 bias should be bearish.

We have RBI credit policy also on April 05^th which will decide the path for Nifty. Which can also create big volatility also.

Trade accordingly.

What is Counter Rebound :- When any security/index say Nifty starts correction, but do not correct fully, and cut the correction short, and in mid way rebounds back again and crosses the previous high from where it started correction. I call them counter rebounds.