Nifty has seen a sharp correction from the major trend channel we discussed in our last update. Though the magnitude of the move has been much sharper than we anticipated. This further reinforces the importance of this longer term channel. As we mentioned in the last update, our working assumption is we are probably in wave 3 at multiple degrees, and so from a long term perspective we would like to give our wave counts sufficient leeway so that we don’t miss out on a major rally. From this perspective 9341 is a very important level and we are going to maintain our bullish outlook unless we see specific bearish pattern developments. Long Term Chart Below:
In the short term 9700/9640 are important support levels though we would wait for positive pattern developments before turning bullish. On the upside 9833-9850 is an important resistance zone for the Nifty.