Nifty weekly chart is on a heavy bearish mood.We had atleast 3 opportunities to take shorts when it touched upper resistance trendline. However by close of last week it is at a previous tested levels.Hence one should not open any shorts immediately. Since there is hype everywhere that it’s at 2 year low ,the punters will try to pull it back and panicking existing shorts.Either we should wait for a pullback to 38.2% or 50% or wait for it to touch upper resistance trendline.Other case is when it breaks the low of last week – we can take fresh shorts.
As per the classical approach all unfilled gaps have to be filled. Hence as per my view nifty has to eventually fill the gap created at 3750 to 3925 (the gap between 2 horizontal lines marked in the chart).
On daily chart No 3 and no 11 were magnificent shorting opportunities with very small risk. However the theory of Media, brokers “Buy at every dip” proved to be a costly affair for most of the investors. When it was time to sell majority were buying!! When the Nifty gapped up heavily to 5400 I have suggested to few friends that it is at resistance level and may drop heavily, still people thought gap up was a sign of strength and went long!! In market margin for error is very less. will elaborate more on this next week. Now since support of 4750 was broken now the same will remain as stiff resistance. Hence one should wait till retest gets completed.
Great site, Raghav. Keep it up.
Thank you Eagle. Please keep visiting the blog and share your valuable comments.
Thanks a lot
great analysis as usual
Amit,
You are always welcome.Your participation is here is much needed.
Hi Raghav, Could you please let me know why 5400 acted as resistance? Because we had strong resistance at 5175 levels and once it broken we thought market will move in uptrend.
Dear Bala,
As marked in the chart 5400 was a upper trendline and it bounced from those levels. Before that it made 2 lower highs indicating the reversal in trend./
great analysis raghav…. Short and to the point…. Pure price action based…. Too good…..
Dear Krishna,
We will try to make it one place for both teaching and learning.