Haven’t talked about Nifty chart since few days but was trying to study charts from different angles and now i have came across some crucial outputs from my study this weekend. As i had talked about a weekly channel breakout last week, we have almost confirmed with second close on Friday but it closed with a nervous feeling. As you all can notice the candle, it has just closed above the channel and its not at all convincing for the long traders. This makes next week trading quite crucial. Most crucial would be opening tomorrow which can almost confirm near future’s trade. If the opening is above 7896 (which is lil bit doubtful) than positive momentum should continue on index but if the open is below or at 7825 (which is likely) than we may continue to witness profit booking as we saw in last two sessions. But as long term charts are still positive as shown by the indicator, profit booking, if any, shall take support at 7700 which is 100 Weekly EMA and also option markets have witnessed too much writing on that strike price PUTS.
Now we talk about Daily chart time frame, then we have closed with a Doji which also states that opening could decide the trend. Indicators are in overbought zone on daily charts so may be a little risk of profit booking stays but it too has 7700 as support zone so there aint much downside for the traders.
Strategy: Buy on Dips with SL of 7700 tgts 7970/8055