ONGC is referred in comments. Is it a selling opportunity ? My analysis suggests, it may be a sell. The stock has made bearish patterns at the top of the rally. But I do not give importance to such patterns since these can be false signals, easily fail. We have to follow momentum, which has beenup. Then, ONGC entered a small trading zone between 840 and 870. On Monday, we advised in our newsletter to clients to use ONGC as a leading indicator for the nifty. A close below 840 will be bearish for ONGC, and Nifty (since ONGC is an index heavyweight).
The Nifty has been making long shadows every day, suggesting confusion in the market. A small trading range between 3350 and 3500 was broken yesterday when the Index closed below 3350. A decline is expected. The key question here is: Is this a correction in an ongoing up trend, or the beginning of a new leg of the bear market ? A 'normal' pullback can take the Nifty down to 3150 support without changing the intermediate up trend. Therefore, at some point, when charts begin to give 'buy on dips' signals, we will take them.