Monday, May 16, 2016

Nothing wrong with the bulls – Nifty View 16-20 May

Last week Nifty traded in a range with bulls in control throughout the week except the last day of the week. Disappointing CPI and IIP data caused some damage to ongoing positive sentiments. Global markets too were under pressure.  
Let's try to understand how to trade Nifty this week. 

Technical Overview: Last week Nifty made a high of 7916 and low of 7753 to close at 7815. That was a range of 163 points. We got opposite patterns on weekly and daily charts. A 'same open high' candle on Friday on daily chart suggesting bearish sentiments. At the same time nothing seem to be wrong with weekly chart as it has formed a 'Bullish Harami' pattern suggesting bulls in control. This setup suggest that though the markets can remain in pressure for one or two trading sessions, finally they can move higher. 

Supports are near  7777 (becoming weak) and next one is at  7740
Resistance near 7940 is becoming weak now.

Nifty needs to move beyond the band of 7750 and 7940 to give us a clear direction.

My View: My view of Nifty being in range has worked well. Still, Nifty could not come out of that range. The range may continue for some more time. So far this is buy  on dips market. Do not try to go short unless we get clear indication. In times to come Nifty chart will break out of current congestion zone.  Considering the current up-trend, lets expect it will break on higher side.    


Chart enclosed below to show the levels.

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