Nifty Recap For The Day!!!

I am back, was busy for last two days. It looks like today was a profit booking day, ahead of Inflation Numbers which are now released post market hours on Thursday, I guess that saves us the Friday mid noon blues! First the 5 minute chart on the left, Nifty opened with a small gap up but failed to hold on to the highs. MACD was tracing a huge negative divergence on the 5 minute chart since yesterday and the weakness was confirmed by price, when it took out the low formed in the morning. After that it was one big down day. The price once below the 20 period EMA found very difficult to come on top of it. It broke out in the last hour of the trade. The hourly on the right has a new pivot high. The MACD is giving sell signal, time to book profits on the longs at least, if not going short. Yesterday we had made a gap of 110 points. The gap open 4371 is the first support. Below that Nifty is more likely to take support at 4350 level, breaking that would confirm that we are going to close the gap. These Gaps are better off closed who would want a bearish Island Reversal if anything goes wrong!!! On the hourly the support looks like at 4360/40 area where it has both the support of the trend line and the rising 20 period EMA (hourly). It is also the 23.6% retracement level of the recent move marked A to B. Below that is the 4260/70 which again assumes significance because we have a 200 period EMA (hourly) support there. There also lays the 38.2% retracement of the move A to B. And of course it also confirms the gap closing.

The Daily chart below shows what looks like a spinning top in other words we just churned today. I had written earlier, Price once it crosses an important moving average then there is more likelihood that it targets the next most important one. So has Nifty done with Price hugging on to the 50 period EMA once it crossed over the 20 period EMA convincingly. The daily chart also suggests supports at 4360/10. Where as the overhead resistance, if today’s high is taken out, remains at 4575/4600. These are bear market rallies, if you have been lucky to catch Nifty at 3800/3900 levels at little higher levels this is the time to take the money off the table. Nothing has changed overnight so no excuse for Euphoria.

When the Going gets Tough; the Tough take their PROFITS!!!