Hello,
The Breakout in Nifty which was long awaited turned out to be a anti-climax as Nifty after opening strongly with a gap gradually drifted downwards throughout the day and finally closed the day well below the 5400 level. There are 2 ways in which we can interpret the market action of the day. One - This was a simple case of profit booking especially since markets after having moved up for the last 4 days was looking for a breather. Second way would be to take this reversal at the key level as a sign of reversal.
As of now, trend in all timeframes remains bullish and hence one shall have to treat the current fall as more of a reaction rather than a reversal unless we continue the downturn by breaking and closing below 5335. Such a close will mean a reversal has indeed happened and its time to close the longs and await opportunities to short the market. One other reason for being bullish would be the fact that markets greatly fell after 3:00 which indicates more towards closure of fresh long build up rather than systematic selling.
For today, Nifty once again faces strong resistance at 5385 - 5400 level which has to be broken for the trend to remain intact. Above 5400, 5475 is the next significant resistance. On the lower end, Nifty gets support at 5335-5350 and below that at 5290-5300 levels.
Regards
Prashanth
Mythri Stocks & Shares Pvt Ltd.,
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