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NIFTY: What is Next?

Nifty has been experiencing a correction after hitting a top of 9119.20 during the month of March last year. This correction has occurred in a channelized manner and today nifty has witnessed nice recovery from 7241.50 after testing support line of this bearish channel. However, there is no evidence of bottom on chart and bulls need to establish a move above 7500 to claim their presence.  Index is staying below 5 days exponential moving average from last few days that suggests accelerated down trend. MACD indicator has been staying below center line and still it’s loaded with bearish momentum that remains a supporting factor for NIFTY bears. However, 14 periods daily RSI is testing oversold territory but it is also staying below its 9 periods moving average that keeps on going down trend intact. 2 Fibonacci projections are converging near 7220-7187 zones. These are the areas where NIFTY might get support. If nifty manages to spend considerable time below 7180 zones then down trend might extend towards 6800 zones otherwise a potential bottom can be expected around 7180-7220 zones for a jump towards 7400-7470 zones. Recovery and stability above 7600 zones needed to confirm a short term bottom and trend reversal otherwise this index will remain under bearish threat with ceiling at 7600 and every rise will be a selling opportunity whereas stability below 7180 will open the doors for 7000-6800 zones. 

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