Nifty has been falling from 5309 for the past 20 days without a meaningful rally or rest. Positive divergences have started showing in some individual stocks as well as the two major indices - Nifty & Bank Nifty. Some stocks have already shown sharp bounce off their lows.
What is in store..? More immediate lows possible..?? When is a confirmation of a "Pause" is known..?? How's the risk-reward status now..?
A short term long play is possible.
If Nifty is resisted @ 4790 - 4815-4835, another low or closer to the lows is possible before the reversal sets in. A mid series rally for a few days..!!
A close above the 5 day ema would be the first confirmation of that pause.
Risk-reward will be to the Bulls favour if a dip comes on Monday afternoon or Tuesday morning.
Remember larger trend is down-Month, Week and Day. Day is oversold without any positive divergence.
Only a positive divergence in Hourly time frame which can last for a few days. Volume action during this expected rally will confirm a reversal in daily.
Stop Loss may be kept below 200sma @ 4640 or 4615 for the short term Longs.
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