This is my first post this week since the last weekend views one, where I had mentioned that 2250/2300 was a support of sorts and would likely stall there and maybe even pullback. Well we did make a low of 2252 on Monday and staged a pullback. Deepawali muhurat trading was also positive and with the best of global cues, a rally is indeed in the making. I would say this is more of confluence at play rather than divergence.
A quick look at the daily chart to see where we stand as of now… Yes! We have a nice little Kangaroos tail (Hammer in the oriental charts) for ourselves to be content with, but a word of caution any slide below 2500 would mean that we are going to eat into the tail and would just signal an immediate threat to test the LOWS! The nearest MA; the 20 periods is way too far away at 3250, the price needs to really rally hard if at all it needs to make contact with it or at least make some range bound moves so that the MA is bought down lower where a comfortable crossover can be attempted! We have a LL in place but to have a HH, we need to close above 3250. Since this is the time where we should take step by step approach to things, Nifty has to conquer 2920/50 before we make any assumptions where this rally or pullback is going to take us. I have shaded the price range on the chart marked as rumble in the box which needs to be watched!
The intraday action as encapsulated by the hourly chart, shows that the price has stalled at the 20 periods MA (the green line) and our initial lower channel line (dashed line) and now is aiming for the 50 period MA which is incidentally near 2890/2900 levels, where as any retracement should take it back to 2525/50 and anything below 2450 would jeopardize this whole pull back thingie!!! So enjoy till it lasts! Amen!!!
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