Nifty has had a spectacular rally from the lows in March. It made a classic series of Higher Tops and Higher Bottoms confirming an uptrend based on Dow Theory.
See the chart below. This uptrend has now been violated as Nifty made a lower top and broke the recent bottom. Thus based on Dow Theory we are now in a downtrend as we have made Lower Tops and Lower Bottoms.
Nifty is now near the 233 day Moving Average area. 10800 is also an important support zone as can be seen by the price action in the past. There is a falling trendline from the top in 2020 and Nifty is testing that trendline now.
So it is possible that we take support here and bounce from this zone. A break of this trendline downwards could spell bad news for the Bulls.
From a pure trend following basis the trend is down till it reverses and becomes an uptrend. Till then we should look at selling on bounces.
