Nifty Recap For The Day!!!

I never knew withdrawal symptoms are supposed to be this good (been tryin2give up smoking and withdrawals always make me go back with a vengeance!). It seems the market is celebrating the exit of the LEFT, as if cocking a snook and saying good riddance to bad rubbish.

Nifty opened with a strong gap up. Yes the overnight Dow gave a comforting feel. Normally in the event of gaps the first trade which comes to mind is Fade the Gap. It failed, in technical study, it is said if the gap fails to fill and the price resumes its journey in the direction of the gap then that move is very powerful. Looking at the intraday action on the 5 minute chart we can see that Nifty frustrated (I suspect it trapped the weak shorts) the traders with a very slow forming rounding turn. It was getting stalled at 4110/15 which was the 13 period MA on the daily chart. Once surpassed, we headed to conquer the next domain 4150.

On the hourly chart we can see we are heading towards the 4250 area. Nifty is likely to face some serious resistance there because apart from the trend line resistance we also have the falling 20 period EMA residing there (Double Whammy?).

Another interesting point in today’s price action is that we seemed to have broken a very important resistance 4050 with a gap. Though I would sound a bit immature (anyway I always admit I am a learner!), we can term this as a breakaway gap since it broke out of an important resistance. So till proven wrong or as some would say guilty (if the gap doesn’t hold and caves in!) I would say again 4050 becomes an important support! The road map ahead is clear 4250/4350. The only solace is that for someone who has missed the train, can enter if Nifty pullbacks to 4100/10 and holds. It’s a nice area to go long with a stop at 4045. This I assume should be the status quo till Friday 11 a.m. when we again have those dreaded, Inflation numbers. I suspect they won’t be bad this time maybe a minuscule difference compared to the last week’s numbers. You see this is politics. A government which is going into the vote of confidence is not going to leave any stone unturned. Who knows perhaps we reduce oil prices by 50 paisey. Now this will be cocking a royal snook at the LEFT!!!!

"If opportunity doesn't knock build a door."

Milton Berle