Nifty weekly at a previous support level

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.