Heat Wave and Modi Wave are the 2 unstoppable waves currently prevailing in the climate. No one would have dreamt that Nifty could reach this high in such a short period. Such a vigorous rally has two implications 1) Still more upside is left or 2) this is a false rally and we may see sharp correction. I am support the first view and SKY IS THE LIMIT for this bull run. Looking at the economy data yet it hasnt recovered so well that it get digest such a move in markets but its just the expectation of the world that New govt will make India a better place and the work has already begun. Many infra and mining bills are cleared on the fast track and also Power sector is seeing some huge reforms. Two laggards in the markets since last few years were Power sector and Mining which has recently outperformed other sectors of the markets. We have Trade Balance number at 12 today during the market hours and that could be important for the markets. In my last post we did mention a range bound movement but we recommended to go long if Nifty closes above 7488 which happened last week. Our First target than 7688 almost has been achieved which now makes us hold nifty with the tgt of 8031 on the upside. Technically indicators have turned positive for now on daily charts while weekly and monthly continue to be suggesting a strong bull run. As we all can notice in the chart, nifty is resisting near to the line which is 7715 level. Once we break the resistance line on the upside than we could see a sharp move ahead to 8031. 5 day EMA has been acting as strong closing support which is at 7568 as of now.
Our recommendation: Hold the longs which has triggered at 7488 with the next tgt of 8031. Keep a trailing closing Stop loss at 7568.
*Disclaimer: all the view are based on technical analysis and are personal. Please rely on our recommendation after thorough study and at your on risk.