Is the Market bottoming out?

Just two days ago, on Friday May 18, the Nifty made an intra day low at 4789. The Index has bounced back to close at 4906 today, Monday. A 110 point gain from the lows is a sign that at least some of the selling momentum is waning.

At 4789, the Nifty also entered a strong support zone between 4700 and 4800. This gives some reason yo assume that the Index may have made a low at 4788. This low may be the final low in a correction that started from 5630. OR, it may just be a support point in a developing trading range. And, the possibility exists that the low may not hold at all.

Assuming that the low holds for now, the interesting question will be: Is the decline over? The Nifty should begin to make a pattern of higher highs for us to start thinking of a rally. The first step should be to look for a close above 5040 which is a minor high made earlier. If the Nifty does this, we will begin to evaluate the trend of the market with a bullish bias. Till, then assume the market is sideways.