Nifty Daily ChartYesterday was a long legged Doji, clearly reflecting the indecision of traders. Today was an Inside Day showing a lack of conviction by the traders.
An inside day is when a security trades within the high and low range of the previous day. An inside day is a sign to a trader that the security is taking a breather from the primary trend, or is in the early stages of a counter trend move. So we are into the second day of indecisiveness. Only a move above 4509 or below 4167 will set the trend for the coming days.
The Daily charts show that negative divergence is intact inspite of the sharp upmove. Todays open and close was below yesterday's close showing no buying conviction.The half hourly charts magnify today's move for us as a decending triangle. This means the break should be on the downside. A break below today's low of 4244 will find support at yesterday's low of 4167. A break of 4167 will find support at 4103-4126 levels . On the upper side today's high of 4363 and yesterdays high of 4509 are resistances.
I have drawn a parallel channel to the channel in which nifty was trading till the 15th of May, 2009. The upper end of this channel will offer stiff resistance.I have marked the resistance and support levels on this channel.
A point to note is that the broader market was rising as advances outnumbered declines by 3168 shares ! This is seen after a long time.
Happy Trading !!