Can the Nifty decline to 4500?

In December 11, the Nifty fell to 4531. A remarkable rally started which took the Index to 5630 before a decline has taken the Index down to 4858. This is the story, so far.

The Nifty has been exhibiting strong momentum on the downside. Given this momentum, and, the complete absence of buyers, it is possible that the Nifty may slide down to the earlier low of 4531?

Readers should know that such questions do not have any ‘yes’ or ‘no’ answers. There remains a strong probability that the Nifty may go down to test the earlier lows. Thus, traders should be mentally prepared to see the Nifty go down towards 4530. Maybe this will not happen, but, then again, it may. So, be prepared, strengthen yourself psychologically for this event.

Cipla – bullish possibilities

The daily chart for CIPLA shows a bullish head and shoulder under process. The pattern gets confirmed if prices close above 330 neckline. There must be many other ways to trade this setup – in anticipation of breakout, on a dip after the breakout, with options, and so on.

Here is the chart:

Given the down trend in the Nifty, I would wait for a close above 330, a rally,  then a pullback to take a long position. But, I am sure that many other strategies are possible. I request readers to provide their own strategies to trade the setup in the comments section.