Nifty Daily
Nifty 20 mins
We mentioned on 27th June, “Markets have not done much since the correction started in November 2010 but everytime built false hopes in either of the directions trapping both bulls and bears. It has now become a norm for Indian markets to break the key levels but have no respect for that level and just take a “V” turn later. These types of movements are both emotionally and financially draining and worse for trend followers…..We now expect 5600 level which has been such a strong resistance zone to be broken and prices might rally till 5650 – 5700 thereby creating false hopes and trapping people on upside above 5600 and will turn lower trapping the bulls that are entering at higher levels above 5600, it being very strong resistance.”
This is precisely what has happened in Indian markets. We have been measuring the pulse precisely! The key level of 5605, which was very crucial before, we mentioned more than a week prior will be taken out without much hurdle trapping the bulls on long side after that and prices will reach only till 5700 before any meaningful correction starts. This is exactly what happened. Nifty opened with a big gap on Friday making a high just above 5700 and reversing immediately closing the week at 5624. We now wait for Nifty to either take out 5583 for some negative confirmation or to move above 5700 for further positivity.
Given strong RSI divergence on 20 mins chart we think Nifty will either move sideways to digest such a huge gain in past one week or might start correcting the entire move up before breaking 5700. Also Reliance (chart shown below) has perfectly retested the resistance line and now looks ripe to start downward correction. If that happens it might drag Nifty down along with it atleast to certain extent.
In short, we will remain very cautious here and observe if Nifty breaks below 5583 or attempts to cross above 5700 levels, to understand further price action!
.png)
No comments:
Post a Comment