Tuesday, January 19, 2016

Inter market Divergence . . . .Though premature for a pullback! ! !

Hi all,

By closing positive by more than a percentage point, Nifty finally gave a relief to bulls. For the entire day it traded in green territory almost after 6 days.
                                                                                                                                                                                                                                                        
As per the earlier posts, Nifty reacted sharply after breaching 7700 levels and came way lower near 7350 levels as expected.

Interestingly on hourly charts, Nifty and Bank Nifty have shown a divergence, i.e. though Nifty broke its yesterday morning lows in the closing time, Bank Nifty held on to the same. This might be very interesting as these index divergences suggest a lot at few times.

However, after a steep fall like what we witnessed in this month, it would be premature to call a hourly inter market divergence as a reversal, though traders should keep the same in mind.

Going forward, Nifty will have strong resistance near 7470-7500 levels, whereas on the lower side 7390-7360-7330 will be good supports.


Cheers....

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