The Fed not only put the banks to stress tests but it stressed out the Bulls too! Everybody wanted to be cautious and not wanting to be caught on the wrong side so it just made sense to take some money off the table and travel light.
The Nifty chart below shows that price is approaching a confluence of fib resistances; the are shaded in the red is 38.2/50 and 61.8% fibs drawn from the swing highs A,B, C respectively to the swing low D. This band is also the historic resistance turned support turned resistance zone (see green ellipses)! The Bulls have been brave; they have even got to the 200 MA on the weekly. As of now weekly resistances are at 3770/3820 and supports at 3500!
Moving on to the daily chart we have a nice uptrend line. Negative divergence is their but I would say it gets confirmed on the break of the TL and the failure to hold on to the previous peak as marked on the chart. There is also a crossover of the 20 and 200 MA to the upside and this point of crossover at 3410/15 is a good support. Btw the MA’s are in a perfect alignment; with the 20 above the 50 and both rising upwards and the 200 in a nice horizontal position to provide support! I guess we have to just o be content with intraday corrections and be careful with our longs! No sure signs of positional shorts yet.
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