Indian market may break out of the range to downside and find support at 9000

The benchmark index NIFTY 50 is now trading within a narrow range since 9 previous sessions. It is obvious that a break out from this range is imminent but the question is to which direction and how to trade that. The upside potential is unlimited since the market is roaming in uncharted territory. However, after such spectacular run it is not uncommon for the market to come back to strong support areas and get fresh fuel from there. The chart below is showing such an important support area at around 8970-9000 level where a big gap exists and also it was the top of a previous Zigzag high. The momentum indicator (proprietary) and the stochastic oscillator are also showing weekness at the moment.

Another thing which is worth worrying is the accumulation/distribution chart below. It can be clearly seen that this spectacular upmove is still not well supported by the accumulation/distributor indicator and a noticeable divergence with the NIFTY exists there.

Therefore, a high probability with good reward/risk potential favours the near term downside till that support zone is reached. If NIFTY becomes able to break the upside resistance of 9370 zone then some further consolidation around 9400-9500 level can be expected.