May26 update

Nifty rebounded today with a gap up opening and went further up during the day with moderate volumes and +ve breadth.

1.Nifty up by 2.3% with 2.65 breadth.
2.Assuming downturn to have ended yesterday after 33 days,today was 1st day of upmove..


Nifty's today upmove signals a short term reversal,this upmove if crosses 5050 on closing basis will confirm the downtrend has ended.Assuming the upmove has started today after 33 days of downturn,I expect two scenarios from here.First is that the downleg was Wave2 of the upmove that started on Feb6th and this upmove will be the Wave3 to be further followed by Wave4 and Wave5.
The second scenario is that we are in the process of top formation and the downturn was after Wave5 completed at 5399.So the new upmove that started today could go to about 5400(+- 100 points) having another attempt at the top to exhaust the excess buyers before turning down again.
From psychological perspective,I expect that there should be a fast leg of upmove before we correct down to 4000 levels.So if we have about 10-15 days of fast upmove , that could be the setup for a big correction.There could be other ways also that Nifty may setup its downfall.