Nifty setup: Correction till 5,380-5,400 likely

I am zooming into Wednesday’s chart to highlight the current setup.

I have been pointing out over the last few days that 5,620-5,650 remains a strong resistance, based on the fact that it is the lower end of the 2009-2010 range projected forward (green).

Wednesday’s price action has corroborated our stance and we now believe that a likely correction should set in.
A bare minimum 23.6 per cent retracement would mean that prices head back close to 5,380-5,400 levels, fresh longs should be avoided till better risk rewards emerge. Aggressive traders can look at selective shorts with 5,630 as the stop loss.