Sunday, April 5, 2009

Leaving GAPS behind

As written in my previous posts, Nifty zoomed above the 1-month futures resistance of 3174. Technically speaking, its now clearly in the breakout zone. But I personally consider a break out after 3 succesive closing above the resistance level if the index is in consolidating mood. Currently, we dont know whether a consolidation will take place or not. It may so happen that Nifty continues its upside rally with its current momentum. Once should closely watch the 3174-3190 zone on futures chart. If breakout has to happen then the next resistance will be arounf 3350 only.

The on-balance volume is suggesting the continuation of the rally. The waves are suggesting the same. But one should become a bit cautious if a closing below 3174 on NF is observed.

Just a positive thought : What will happen if a truck is overloaded ? It will move very slowly with high chances of a break down.......But if its empty or is lightly loaded, then it will run like a racing car......Same is the case for Nifty. Currently very few people are holding longs or have taken delivery of shares. Still few people are holding onto their shorts. Maybe the index will move ahead because of lower participation in the rally and fall only when every people will start thinking of the same.......Happy trading !!!!

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Disclaimer:

Investing in stock markets carries inherent risks. Readers are requested to consult their financial adviser for trading / investing. The views expressed here are solely that of the author and he wont be responsible for any gains or loss arising to the readers for trading based on the expressed ideas.