Nifty at crucial juncture!

 Nifty Daily

Nifty 60 mins

Nifty continued to show very good weekly performance and poor results by heavy weights like Reliance did not hamper the uptrend.

Nifty now lies at very crucial juncture of 5200 levels. This is the level where the trendline from November 2010 (since down trend started) intersects prices. As seen on daily chart, a close above 5250 level will give confirmation that this channel is broken. However on Sensex 17400 – 17500 will provide that confirmation and we have seen it in past when Nifty gave false breakouts above the trendline but Sensex did not. First half of next week will provide additional vital information about future path of this up trend. If prices struggle to break above this trendline and closes below 5100 we will know the best part of uptrend is probably over and we can be in wave iv of this impulse or a correction of this entire move up has started.

RSI has also entered into new territory which was not seen during the entire move down in 2011 and so this trend up is different than the previous corrective up moves. The momentum is stronger than prior moves.

As seen on 60 mins chart, RSI has been moving in very bullish pattern taking support near 50 – 60 levels. This type of movement is seen usually during impulsive moves and so we are sticking with impulsive wave counts for this uptrend. Also the bias continues to be positive and there is not sign of exhaustion as of now.

In short, we remain positive but will just remain cautious as we are running into series of resistance levels. A close above 5250 will indicate further positivity atleast till 5325. Any move below 5100 will indicate short term pull back or correction of entire uptrend has started.

Please trail your stop now towards 5095 levels.