Finally, A Break to the Free Fall ?
After the non stop free fall of the past five days, investors and traders were hoping at least for a break, when the markets opened on Tuesday. Nifty futures opened slightly higher and immediately traded upwards to the 5825 levels. However, trading mainly remained range bound between 5800 and 5830, till around 2.00 PM. The outer ranges of this trading range were between 5770 and 5840. Trading seemed to be a low key affair till the 2.00 PM mark. The European markets opened at 1.30 PM with gains and were trading steady. But, instead of acting in accordance with the positive cues from the international markets, Nifty futures started to drift slowly towards the lower area of the trading range. However, the drift which started as a normal test of the lows became a deluge of sudden selling. Nifty futures easily broke through the then day's low of 5770 and also the previous day's low of 5746. The contract even broke the three month low of 5727. It recorded a low of 5700 before any semblance recovery was indicated. A notable feature of Tuesday's trading was the fact that the Two major indices, Nifty and BSE Sensex never broke their respective November lows. The sudden down move reversed from the 5700 and 19000 levels of Nifty and Sensex respectively. The recovery from these levels were also as dramatic as the free fall. The free fall of 120 points and an equivalent recovery took just one and a half hours. The close was at 5808. Before dealing with the next possible outcomes of this swing, let's check the charts.
Nifty Futures - Intra-day Chart
