Nifty spectacular rally - A surprise for many!

 Nifty Daily chart:

 Nifty 60 mins:

India is not the only market that has rallied hard yesterday. Asian markets like Hang Seng (HongKong), Taiwan, Nikkei (Japan) registered more than 1.5% gains. The rally in India is not in isolation but in sync with other Asian indices and we are not seeing any exhaustion yet in Asian markets.

Yesterday’s rally has been strong and we reached the target zone of 5500 – 5550 in single day. Also the gap up opening indicated that 5425 was indeed a crucial resistance level. We have said before crucial support and resistance levels are usually taken out with gaps and that is what we saw yesterday. However from trading perspective this kind of openings ensures that traders do not make money. A gap up of almost 50 points and then continuation of rally indicates there is strength left in this rally. We will not come in way of such a strong rally. However our target of 5700 mentioned on 3rd January report looks now achievable within February itself instead of March.

From wave structure perspective, it seems that wave v is extending and we are in minute wave (iii) of wave v.

Midcap index and stocks continued its spectacular performance. As long as the gap between 5425 and 5475 remains unfilled the trend is up with next strong resistance near 5700 now!