Market Update

Good morning, everyone. Following up on our discussion yesterday regarding my cautious stance on the market, today’s price action has reinforced my thesis. If anything, my confidence in a bearish outlook for the immediate term has only grown.

Here is a breakdown of why I believe the path of least resistance is currently lower.

1. Breakdown of Crucial Support

The Nifty has broken below yesterday’s low, which I viewed as a vital pivot point for the bulls. This breach signals that the selling pressure is not just a momentary dip but a shift in momentum.

2. The Gap-Fill Theory

There is a significant gap on the chart (highlighted by the rectangle in my previous analysis). In technical analysis, these gaps often act as magnets. Given the current weakness, there is a very high probability that we will see this gap filled in the coming days as the market seeks a more stable floor.

3. Failure of VCP Breakouts

One of the most telling signs of a weak market is the failure of reliable setups. Yesterday, we saw several Volatility Contraction Patterns (VCP) attempt to break out. However:

• There was zero follow-through today.

• Most of these setups have completely failed, trapping aggressive buyers.

When high-quality setups fail to yield results, it is a clear "under the hood" indication that the broader market lacks the strength to sustain a rally.

The Game Plan: Sitting on Cash

We are likely looking at another "down-leg" from here. In a market where breakouts are failing and support levels are crumbling, the most productive action is often inaction.

• Strategy: Sit on cash.

• Objective: Capital preservation.

• Goal: Wait for the gap to be filled and for price action to stabilize before even considering new deployments.

Thank you for following along. Your engagement gives me the motivation to keep sharing these real-time market updates.

Have a productive day!

Disclaimer: This post is for educational purposes only. I am not a SEBI registered advisor. Please consult with a financial professional before making any investment decisions. Trading involves significant risk.