FEW OBSERVATIONS

1. Last two trading sessions nifty closed above low ema, today tried high ema but failed terribly even to touch it. Today the first retrace to 20min ema, was sold into which generally attracts buyers after a gap up. So it’s planned selling at higher levels.
2. Todays close is not only a new 2 day low but also a 20 day low.
3. Seeing the long term chart, its first time since march2009 that 20dema and 50dema lines have crossed bearishly today. They were not even within kissing distance till now, now they lay entangled.
4. First time nifty closing below 20 week ema line, last week, in long term weekly chart.
5. Similarly a bearish cross of 5w and 13w lines on long term weekly chart since March 2009.
6. Volatility index is at 26, showing that still retailers have not panicked.
7. Best time for more big boys selling, (every site during weekend was optimistic of a bounce from the so called oversold conditions.) Markets can keep them oversold for few more days, while everybody anticipates a bounce.
8. Looks like the surprise is going to be on the lower side, there is a channel break coming on daily charts at approx 4800, lower line being joining of last two lows, recent being at 4766.
9. I feel that instead of going higher and then the selling starts, this time it will first touch the 200dma line at 4625-50, as retailers are catching falling knives in expectation of a bounce (but this correction seems to be different, as the long term trend line got broken).

AND IF THIS HAS TO HAPPEN IT WILL BE IN NEXT TWO-THREE DAYS.MAY BE WE GET A NEAR/BELOW 200DMA CLOSE THIS FRIDAY.

Keeping fingers crossed and watching 4760 or 4950 to get broken convincingly for next move.