Nifty Recap For The Day!!!

On Monday I had spoken about a technical bounce not ruled out, and that is what we have achieved so far (just about managed 23.6% retracement from the lows). Much of it was attributed to the rumors about the out of court settlement between the feuding Ambani brothers which led to the entire Reliance pack leading the rally! Now talking technicals the daily chart below shows that Nifty is trying to lunge at the falling 50 periods MA(at approx 2880) and also going to test the broken trend line (the blue line). The earlier spoken level of 2700/2750 held fort till now. Another important 2780 now joins the battle for the beleaguered bulls. The resistances remain the same 2880/2920 and a real mean one at 2950/60. Therefore the new range we have of about 150 odd points. A break on either side would result in a min 150 point move. If broken on the upside it would work as Viagra for the bulls and immediately signal the reversal of this trend. On the other hand if we break on the downside then things become very very nasty because then testing the closing low of 2500 is THE TARGET!

The hourly chart below illustrates a few important points we have already discussed earlier. The price had overstretched form its MA’s so a pullback was in order. The 38.2% and the 50 periods MA are both at 2880 near about (remember our resistance 2880). What’s interesting is that there is a Hidden Bearish Divergence on the cards (yeah yeah here I go again about Divergence!)! Any one who doesn’t understand what I am talking about can got to my Divergence post to get an idea of what I am talking about. And before someone kills me for spreading panic lemme just put it in writing that Divergences are JUST WARNINGS! The real trade comes into practice ONLY and ONLY with the confirmation from PRICE. In this case break below 2780 con confirm this one!

At the time of writing this post DOW was in dumps (down about 180 points), so a gap down is a certainty, if Dow doesn’t do any magic overnight. These are trying times for the traders, and gap down if sustains 2750 is good buy for swift intraday trades (it will be very volatile, if you aint the one with nimble fingers…stay out)!

"The only thing that ever sat its way to success was a hen." Sarah Brown