October 14, 2014

Markets likely to bottom out

Current trend is down and will reverse to buy on close above 8000 (more strength above 8200).

For all the weakness in global markets, our markets have still been holding above 7800 and have barely corrected 100 points this month.  Option writers are winning so far and there is no change in open position status.

Since markets are refusing to go down, the chances increase that they will go up. Let's see how this happens. Close above 8000 spot AND near day's high will be the first confirmation.

EOD charts

Intraday charts

First 3 bars on 5 min charts pointed to strong selling. The buying in the third buy failed to translate to more gains and the first box shows the region where a short trade could have been considered. Trailing SL stopped out the short trade in the second box.

Trades later were completely unreliable as the charts did not create the confidence for long or short trades.

Hourly charts show strength above 7930 spot. If this happens in next 2-3 days, it will also mean markets have formed a higher swing low on hourly charts.

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