Nifty failed to hold on to gains from the crucial 9580 level. Yet as long as we continue to stay over the 9342 level, we will continue to look at the rally from 9342 to 9706 as wave 1 of the next medium term trend. Accordingly we will continue to see the ongoing fall from around 9700 levels as part of wave 2. This will remain our preferred count unless we break below the 9342 level. Nifty short term chart below:
On the upside 9580 level (and more broadly the 9565-9615 range) is the crucial resistance zone. We don’t recommend new investments unless there are specific setups in play (like Nifty Pharma as discussed in our last post). This will remain true unless we cross this zone as this may be the first confirmation that we are indeed in the next leg of the intermediate trend.