NIFTY Daily Chart Technical Analysis
(Each candlestick represents one daily of stock market activity)
On Aug 23, I posted that NIFTY is expected to rise above 5575. The resistance is near 5871. Currently, the NIFTY is into this zone. This rise is primarily due to the bank rate revision as well as approval of higher FDI in various important sectors of Indian economy. However, it was as if the candlestick chart aided by some Fibonacci tracing and momentum indicators, was showing an expectation of rise above 5575 much before the govt. declared policy changes. Somehow, as if, the chart knew!
Today, we can see that NIFTY saw heavy trading and a small fall during the day, indicating that long positions were being liquidated in large numbers. This, couple with a previous resistance at the same level, could mean that the market might see some more horizontal movement or further fall from this level tomorrow.
Also, two sudden gap ups with increased trading could be some sort of a 'bear trap' - the jump before the fall. Avoid getting too excited at the moment about the index jumps.
NIFTY Daily Chart Technical Analysis
