A BLOW OUT RALLY
It was a blow out rally for Indian markets as benchmark indices surged more than 4% in the week gone by to close at the highest level after 11th January 2008 on weekly basis. The special thing about this week’s trading was the successful crossover of the resistance of the rising trend line adjoining tops of October 2009 and January 2010 as shown in the weekly and monthly chart below. Almost for past one year, Nifty was trading in the rising channel as shown in the weekly and monthly chart below. There was a tough resistance of the upper line of this rising channel around 5740 this time around. Nifty crossed this key resistance by closing at 5760 on the very first day of the week. On the subsequent sessions of the week, benchmark extended the gains by touching a high of 5901.65 on Thursday and finally settled at 5885, gaining 245 points or 4.34% on weekly basis. This was the highest weekly gain for Nifty after the week ended 28th August 2009.
The technical outlook on market continues to be positive. While the possibility of running correction is not ruled out in the near term considering the fact that Nifty has run up nearly 10% in last 13 sessions, the fact that the benchmark has decisively crossed a big resistance as mentioned above, portrays a very bullish picture for the medium term. 5740, the erstwhile resistance, will now act as a meaningful support on the downside. On the upside, extension tool gives an immediate target of 5994. Traders are advised to ride their trading long positions with the stop loss of 5815, which is Thursday’s low, the day on which markets saw sharp intraday profit booking and closed in red for the first time after 7 consecutive up days.
nice to see your views!!!
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