Weekly channel which i mentioned last week is still intact and the range which was crucial for breakout has not been breached yet signalling a tight range bound movement this week. While being volatile Nifty almost burnt fingers for day traders. Technically speaking, Nifty weekly chart is showing mixed signs which means cautious view to be continued….
Looking at indicators on weekly chart still momentum seems to be continuing for the upside rally as MACD is just crossing over zero line which considered to be buy a signal and even looking at the global cues last night we can be rest assured than we shall breach channel resistance line on monday which is at 8418 now! But the most dangerous sign on the card is bearish crossover of 50 weeks average below 100 weeks average before 3 months which is still not reversed. Secondly daily candles are not showing any signs yet of convincing upmove! Such time in history are considered to be volatile and we are experiencing the same moves currently. But to get more biased on the breakout, option markets are suggesting a strong upmove in coming months as Put writing is witnessed most at 8200 while fresh call writing was seen at 8700 so the strategy would now be going long blindly on channel breakout at 8418 next week with 8265 as Stop loss.