Tuesday morning opens with optimism and hope for bulls. The Dow and the S&P were up big time overnight, while Asia is up and the SGX Nifty suggests a big gap up.
The short term outlook is for an uptrend. the Nifty seems to have made at least a short term low yesterday. Resistance should come first at somewhere near 4070 on the July futures. I will trade with a bias for long positions.
Was the decline just a correction or more? The answer will come much later - if the Nifrty were to cross the previous high of 4700 then this was just a correction. But at that point the answer would be academic. So, based on your time frame, identify the trend and go with it.
I should remind readers of a simple strategy : the first pullback. Once a new trend starts, the first pullback in the trend often provides a low risk entry. On charts, pullbacks can be visible when an Oscillator (momentum indicator) falls to the middle line. (This will be 50 for the RSI and Stochastics, zero for the CCI, and zero for the 3/10 oscillator). Here is a chart explaining this concept.