Like I had mentioned in my post yesterday that one can go long with a tight stop at 3050 for a target off 3225/50. Well with so much of volatility around we did manage a high of 3238 before giving up all the gains. Any up move is met with fresh selling and all excuses to squeeze whatever intra day gains are there to be had. Nobody wants to take chances of taking home some heavy line as the previous huge gap ups and downs are still playing games with traders’ minds.
Anyway a quick recap of today’s daily chart given below, we can see that Nifty found resistance at the channel line (lower) and quietly retreated back. We have an Inside Bar (IB), and the only way to play it is, as it ought to be played; that is go long or short on the breach of the high or the low of the IB!
The hourly chart below shows that the price is contracting within the channel lines (thick black lines) but also seem to be forming a falling wedge as marked in red dashed lines. As expected the price met with resistance at the falling 20 period MA and retreated. In this process we have made a lower high and a higher low for ourselves as of now. This means...yes a kind of contraction (if u remember your patterns you will agree with me that LL’s and HL’s are normally a prelude to triangles and wedges) and a breakout in any direction is imminent. Once again 3225/50 is of paramount importance before we even begin to think of anything big in terms of upside targets.
"If it is to be it is up to me."
Origin Unknown
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