Monday’s action was considered as day one of an attempted rally as Nifty, though undercutting the correction low of 11,634, closed in the green at the top 50% of its range. In the next two sessions, Nifty managed to stay above its correction low of 11,634.
As today’s action qualifies as day three of an attempted rally, we are changing the status of the Indian market to a Rally Attempt from a Downtrend.
This week, in three sessions, Nifty is up more than 3.5%, recovering the losses that occurred on Saturday post budget announcements.
We would prefer to see a follow-through day (Nifty advancing more than 1.2–1.5% on higher than yesterday’s volume) before shifting the market to a Confirmed Uptrend.
Should this occur, the focus will be on ideas that show the best relative strength with a good accumulation. Stocks that recover the quickest tend to lead the next run.
On the flip side, if Nifty breaches its recent low of 11,615, the market will be moved back to a Downtrend.