#Nifty directions and levels for August 5th.
Good morning friends 🌞 Here are the directions and levels for August 5th.
Market Overview
Still the correction is continuing the Dow Jones chart, reflecting a bearish sentiment. Our local market also shares this sentiment. Therefore, today might see a significant gap down at the opening, as indicated by a 250-point negative start in GIFTNIFTY.
There is still a tug-of-war between the Nifty and Bank Nifty charts. According to the wave structure, Nifty has a correctional structure, while Bank Nifty has a range-bound structure.
>How does this affect the Nifty chart? It's just sentiment. If, during the correction, Bank Nifty supports it, then the correction would continue effectively. On the other hand, if it tries to maintain the range market, then it would take a pullback. If this happens, Nifty might undergo consolidation or possibly a pullback, because the banking sector has the major weightage in Nifty.
However, I share the same direction for the Nifty and Bank Nifty charts. that, If the gap-down sustains (consolidates) or breaks the immediate support level with a solid candle, then the correction will likely continue further. This is our basic structure.
Why Do I Mention the Pullback Levels of 23% and 38%?
In this scenario, if the market takes a solid pullback in the initial phase, it could reach those levels. Usually, the trending market could take a maximum 23% to 38% pullback of the minor swing. but it won't sustain. If it rejects there, then the trend will continue once it breaks the previous bottom. That's why I mention those levels.
What Should We Do If It Breaks the 38% Fibonacci Level?
Whenever the trending market takes a pullback of more than 38%, the momentum will reduce a little bit. If this happens, we can expect some consolidation into a range market. and The range market targets are expected to be a minimum of 50%, 61%, and 78%. If you are an options buyer, the premium might not increase in this sentiment, so trade carefully.
Market Overview
Still the correction is continuing the Dow Jones chart, reflecting a bearish sentiment. Our local market also shares this sentiment. Therefore, today might see a significant gap down at the opening, as indicated by a 250-point negative start in GIFTNIFTY.
There is still a tug-of-war between the Nifty and Bank Nifty charts. According to the wave structure, Nifty has a correctional structure, while Bank Nifty has a range-bound structure.
>How does this affect the Nifty chart? It's just sentiment. If, during the correction, Bank Nifty supports it, then the correction would continue effectively. On the other hand, if it tries to maintain the range market, then it would take a pullback. If this happens, Nifty might undergo consolidation or possibly a pullback, because the banking sector has the major weightage in Nifty.
However, I share the same direction for the Nifty and Bank Nifty charts. that, If the gap-down sustains (consolidates) or breaks the immediate support level with a solid candle, then the correction will likely continue further. This is our basic structure.
Why Do I Mention the Pullback Levels of 23% and 38%?
In this scenario, if the market takes a solid pullback in the initial phase, it could reach those levels. Usually, the trending market could take a maximum 23% to 38% pullback of the minor swing. but it won't sustain. If it rejects there, then the trend will continue once it breaks the previous bottom. That's why I mention those levels.
What Should We Do If It Breaks the 38% Fibonacci Level?
Whenever the trending market takes a pullback of more than 38%, the momentum will reduce a little bit. If this happens, we can expect some consolidation into a range market. and The range market targets are expected to be a minimum of 50%, 61%, and 78%. If you are an options buyer, the premium might not increase in this sentiment, so trade carefully.
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