Nifty 50 - Top in place at 7,807.50

Nifty 50 top in place at 7,807.50

The rally over the last week just took a few hours to wipe away, this is a classic sign of a trend reversal. The critical level at 7,661.40 was broken as was it made up of hot butter and the next support at 7.577 has been penetrated, but really broken yet. However, I do think it will be a matter of time before this support will be broken too for a continuation lower to 7,441.65 and break below this support will firmly confirm the top.

I think that we have seen a long term top at 7,807.50 ending not only the rally from August 2013 at 5,118.65, but also the larger rally from October 2008 at 2,252.75 and that a correction to at least 6,360 should be seen. A break below this strong support will call for a much deeper correction.

Short term I will be looking for resistance at 7,464.05, which ideally will protect the upside for the next decline.