Last week the bias had turned negative and the breakout of the 5350-5550 range was anticipated to give us direction. The Nifty successfully and decisively broke out on the upside with a huge bullish candle by almost a 100 points to touch a new high of 5647. This leaves a run of a hundred points for the Nifty to complete the range break target of 5750. Since we have a four day trading week, looking at volumes would not give the correct picture. This will be analysed on the daily chart. Amongst the oscillators, stochastics and macd continue to be in negative divergence, though macd continues to be in a buy. Rsi 14 has shown some strength by moving above the peak made in August 2009 .As mentioned in my earlier posts, historically, resistances on the way up are few.
Resistances are at 5705-5750-5790 and Supports are at 5550-5445-5350.
The Nifty continues to make consolidations at regular intervals forcing the bears to interpret it as distribution. Then surprise the bears with a new high supported by their short covering ! A new high has now become a habit for this rally which has been the most skeptical one I have witnessed .Oscillators are yet in negative divergence showing momentum too never approved of this relentless run from March lows. So we witnessed a new high yet again at 5647. Volumes have been very average and the advance decline line continues it's downmove. The rising wedge seen on half hourly charts continues to be support and resistance. So we keep a watch for a break from this pattern to book profits and reduce exposure. Moving average supports are at 5 dema 5587, 10 dema 5545, 20 dema 5506.
Resistance at 5672-5700-5780 and Supports are at 5610-5567-5500.
Happy Trading !!