First time in 9 months Nifty closed below 200 day moving average

Today first time in 9 months Nifty closed below 200 DMA (day moving average) followed by break in trend line last week. This correction in the market is sharpest in 9 months apart from one correction in May 2009 (when market corrected from 4600 to 4000 levels of 13.3%), about which I mentioned in my posting.

When Nifty started correcting from 6000 levels in November which is also 23.6% retracement level in Fibonacci retracement from top 6350 levels. From November Nifty started making bear market trend which is shown in the graph. At present that trend-line is ending at 5400 levels which is also 61.8% retracement level in Fibonacci and also Nifty has consolidated at this level for 2 months in July and August in 2010.

And also we can observe similar trend-line in RSI, where line meeting top line, line meeting intermediate top line and line meeting bottom lines are indicating the correction.

Interestingly, I got a graph (from one of the blog which I follow) which shows DIIs (Domestic Institutional Investors) and FIIs (Foreign Institutional Investors) price action and Nifty movement. From the below picture we can observe that in last 15days FIIs were net sellers almost everyday and Nifty either corrected or consolidate everyday in conjunction with FII flows.