Is a correction expected soon?

Traderji

Super Moderator
#2
NSE Nifty forming a bearish divergence!

onlinetrader said:
Is a correction expected soon(or started)? All stocks have run up a lot since the last few trading sessions.

What do the charts suggest Traderji?
NSE Nifty forming a bearish divergence!

Divergence
Occurs when the trend of a security's price does not correspond with the trend of an indicator. Divergences are sometimes used as contrarian indicators.

Oscillators are most useful and issue their most valid trading signals when their readings diverge from prices.

A bullish divergence occurs when prices fall to a new low while an oscillator fails to reach a new low. This situation demonstrates that bears are losing power, and that bulls are ready to control the market again--often a bullish divergence marks the end of a downtrend.

Bearish divergences happens when prices rally to a new high while the oscillator refuses to reach a new peak. In this situation, bulls are losing their grip on the market, prices are rising only as a result of inertia, and the bears are ready to take control again. This is exactly what is happened in the NSE Nifty Index (see attached chart).

A classic bearish divergences occur when prices rise to a new high but the oscillator can only muster a high that is lower than exhibited on a previous rally. Thus bearish divergences often signal a sharp and significant reversal toward a downtrend.

The level to watch for a confirmation of this bearish divergence is a close below 1790.00 (which is also the lowest level over the last 5-7 trading sessions).
 

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#3
Good explanation on a bearish divergence.

I will have to watch for 1790 on the nifty! keep it up and we need more tutorials like this.
 
#4
Re: NSE Nifty forming a bearish divergence!

Traderji said:
NSE Nifty forming a bearish divergence!

Bearish divergences happens when prices rally to a new high while the oscillator refuses to reach a new peak. In this situation, bulls are losing their grip on the market, prices are rising only as a result of inertia, and the bears are ready to take control again.

Thus bearish divergences often signal a sharp and significant reversal toward a downtrend.

The level to watch for a confirmation of this bearish divergence is a close below 1790.00 (which is also the lowest level over the last 5-7 trading sessions).
Interesting view on divergence. Looks like the BEARS have taken control of the Markets! Time to become a bear now??
 
#5
Good call traderji. I closed all positions after the market went below 1790. what will be the extent of this correction?

thanks again.
 

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