In the previous weekly report it was mentioned that 3196 has emerged as a very strong support zone for NIFTY. On the last trading session of the previous week the NIFTY then made a low of 3198.95 and bounced up to close at 3280. Thus, confirming that the said level of 3196 is actually a strong support.

Moving ahead, although the NIFTY has taken support at the said level, we still see that the momentum is downward and the NIFTY is trading in bearish zone. Its best to wait for the markets to get stable and then enter… untill then trade with lot of caution and if at all you go long from here… then keep 3196 as your stoploss level on a closing basis. On the upside, the NIFTY will face strong resistance near 4275 on a weekly basis and a close above 4455 will bring it out of the downward momentum on our charts.

Its clearly seen on the chart that the downward momentum ( indicated by red diamonds ) still exists and the support was taken at 3196. One should now wait for the downward momentum to stop and for the NIFTY to enter upward momentum ( indicated by blue diamonds ).