Good follow up buying breaking out of pink and green trendlines as shown in chart I. Volimes and breadth supported the upmove which is a huge positive.The breakout also negates the bear flag which was being considered.With the breakout from the falling wedge-- shown in blue dotted line in chart II-- sustaining for the second week , the target of 6481 could be achievable.
Weekly Chart III
Chart III shows Nifty resisted at the blue dotted trendline which has been resistance since August 2008 with a breakout in September 2009 which failed leading to the downtrend to 5177. Breakout from this trendline is required to achieve the target of 6481.
Inside Day pattern formed showing indecision and appearance near the end of a prolonged uptrend may suggest that the rally is getting exhausted and is likely to reverse.Negative divergence in the stochastics gives strength to this view. Breakout from high of the pattern at 5872 or low at 5778 to set further trend. The low coincides with green trendline support as shown on the daily chart.
Point to be noted : 5,10,20 emas are bullishly aligned now with the 50 and 200 ema. Only a bullish cross of the 50 with the 200 is required to turn the medium term bullish.
Half Hourly Chart
The half hourly charts show the rising wedge support at 5765-5810 for the day. Friday's low at 5811 and Inside day low at 5778.
A stop of 5750 on longs.
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