NIFTY - A "W" Formation on the cards?
- Has taken support at 4720 levels couple of times.
- Positive Divergence seen in RSI.
- W - Formation on the charts?. If 4720 holds on closing basis, can move to 5100-5200 levels.
- Immediate Resistance for NIFTY is around 4879-4934 (Gap Created by a Gap Down opening on 03-Oct-2011. Once NIFTY closes above 4934 on closing basis and as long as it is above 4879 can attempt to reach the next gap area of 5060-5110 created again by a Gap down opening on 21-Sep-2011. Above this closing the next resistance & the major resistance remain the recent double top around 5168.
So by this, if 4720 has to be taken out most likely it'll be by a Gap-Down? Lets keep a open mind & take positions accordingly. Short below 4700 for a free fall of 3-5%. Above till remain cautious without an bias.
NIFTY 6 Months Daily Charts
Bottom Line: NIFTY is forming lower highs & in a consolidating range. Global scenario points to NIFTY might move lower & break its key support of 4700. But till that level holds there is no need to be bearish.
Market Wisdom: Through past observation one can notice when key Support or Resistances have to be breached, More often than not they are breached by either Gap-Down or Gap-Up respectively.
Happy Trading / Investing. Would be glad to receive comments from all on the views expressed.
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