July had been a terrible month for all the investors and August has not started any better. But close analysis reveals that the market may have done its down move and could rally over the next few days.
The chart above shows the Nifty in brown and the Midcap index in the blue color. Notice that the brown line made a fresh closing low today but the blue line has not made a fresh new low. It is slightly above the low point that it made yesterday. These types of divergences on the Indices generally can mark a small shift in sentiment.
With major support for Nifty also at 11,000 we could be looking at a decent bounce in Nifty. As a trader we can only look at the risk-reward and currently with the support and the divergence my bet is a long trade offers better risk-reward ratio now.