The bullish undercurrent that we could sense for the past three days finally turned out to be a move to trap the bulls themselves and NIFTY corrected significantly (exactly by the same amount of an expected upmove).
All this time, the concern that this rise has been with low volumes indicated that the move is not genuine and this was expected to happen anytime soon, but the expectation that this will not happen for this expiry proved to be wrong.
What now?
Given this situation, it might again be premature to say for sure that market is going to crack from this level too soon. It has to again penetrate through all the well known support levels, initially a test of 3334 followed by 3300 levels.
Any break below 3256 will clearly confirm the downtrend and a break below 3120 going forward would mean disaster. The question now is that can this all happen again so fast as it happened on the upside.
This is not clear at the moment and NIFTY could also be range bound from 3200 and 3447 levels before the next big move is triggered.
So it is wait and watch for the time being.
Resistance levels : 3403, 3423, 3447
Support levels : 3334, 3303, 3256
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