Hi All,
Though there was a nail biting fight going on between Congress and BJP to form a government in Madhya Pradesh (almosgt clear that Congress will form it now), and the same will be cleared by today or in few days in case there is a hung assembly, that is not at all a case for markets today.
It is almost visible, at least for today, that the ongoing events (including unpredictable resignation of the RBI governor) were seemed to be discounted in the recent fall from 10940 to 10330, which yet again proves that "Buy the rumour, sell the fact" analogy works and is dependable to an extent.
However, let us not be hasty and jump the rope to call this as the short term trend reversal.
Today, Nifty recovered sharply from the lows near supports of 10330, and managed to close at 10550, near to the day's high of 10567, which is a sign of relief, at least temporary, to the bulls. Also, Nifty has created a Hammer like pattern on weekly charts, though not a valid one as it is not at the end of a daily down trend, but still a buying pressure candle coupled with a strong Bullish engulf pattern on Daily charts
Next few days are going to be very crucial for Nifty with 10300 - 10000 - 9700 levels being the crucial supports, whereas 10600-10700-10950-11100 are important hurdles going up.
A close above 10480 is surely encouraging for bulls at least for near term (based on RENKO Charts), however it is is a huge responsibility of bulls to sustain markets above 10480-10530 levels on a closing basis.
10480 is very crucial as per RENKO daily charts, a monthly trend line near that area and it's a 20 month SMA.... (Please find the monthly candlestick chart below)
As there is a hidden RSI divergence (an opposite of regular divergence and a an effective one) on monthly charts, I personally feel change in the midium term sentiment is possible only above 11050-11100 levels for Nifty, till then.... It's advantage Bears.....
As mentioned, let's wait for some confirmations before executing a trade, till then, advice is to trade with strict stop loss and targets with proper risk reward....
Cheers
Hrishi
Though there was a nail biting fight going on between Congress and BJP to form a government in Madhya Pradesh (almosgt clear that Congress will form it now), and the same will be cleared by today or in few days in case there is a hung assembly, that is not at all a case for markets today.
It is almost visible, at least for today, that the ongoing events (including unpredictable resignation of the RBI governor) were seemed to be discounted in the recent fall from 10940 to 10330, which yet again proves that "Buy the rumour, sell the fact" analogy works and is dependable to an extent.
However, let us not be hasty and jump the rope to call this as the short term trend reversal.
Today, Nifty recovered sharply from the lows near supports of 10330, and managed to close at 10550, near to the day's high of 10567, which is a sign of relief, at least temporary, to the bulls. Also, Nifty has created a Hammer like pattern on weekly charts, though not a valid one as it is not at the end of a daily down trend, but still a buying pressure candle coupled with a strong Bullish engulf pattern on Daily charts
Next few days are going to be very crucial for Nifty with 10300 - 10000 - 9700 levels being the crucial supports, whereas 10600-10700-10950-11100 are important hurdles going up.
A close above 10480 is surely encouraging for bulls at least for near term (based on RENKO Charts), however it is is a huge responsibility of bulls to sustain markets above 10480-10530 levels on a closing basis.
10480 is very crucial as per RENKO daily charts, a monthly trend line near that area and it's a 20 month SMA.... (Please find the monthly candlestick chart below)
As there is a hidden RSI divergence (an opposite of regular divergence and a an effective one) on monthly charts, I personally feel change in the midium term sentiment is possible only above 11050-11100 levels for Nifty, till then.... It's advantage Bears.....
As mentioned, let's wait for some confirmations before executing a trade, till then, advice is to trade with strict stop loss and targets with proper risk reward....
Cheers
Hrishi
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