Medium Term Trend: ↑UP (Changes to down below 10300)
Resistance at 10850: On Friday Nifty once again failed to move above 10850 and dropped to 10720 during intraday trade however pulled back towards 10760 levels to close with a modest loss of 50 odd points.
In last couple of posts we have been mentioning about Nifty hitting some kind of top around 10850 levels. Now as we have seen Nifty indeed is not able to cross it but neither its breaking below 10700 levels on the downside. Its moving in a tight range/band between 10700-10850 levels. Markets seems to be in correction mode but like we mentioned in the previous post, its very much posible that this correciton gets over in a sideways trading (its not always necessary markets to fall price wise to complete a correction).
Basis latest chart, a move above 10870-90 could indicate that markets have finished with the correction and its ready to move towards higher level towards 11100-11300. On the downside, Fridays lows assumes a lot of significance. In case Nifty break and sustain below 10710-10700 leves for some time , then we could see some more weakness towards 10550-10600 levels and break of 10550 levels could push Nifty towards 10300 area which is the final level for this upmove and should hold incase markets are not planning to bring about any material change on the charts.
Sentiments are slowly improving (improving China situation/strong Dow etc) hence if we see weakness in Nifty then one needs to be careful about it. On Horly charts we continue to see some negative divergence which agains could be a cause of worry ( especially if Nifty trades below 10700 levels on Monday).
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