Medium Term Trend: ↑UP (Changes to down below 10900)
Below 11400: Nifty opened with a 'gap-up' around 11400 and traded whole day around this level but couldn't manage to close above it, still closed with a gain of around 60 points at 11371 levels.
Yesterday we had a 'gap down' open and today the gap down area is covered with a 'gap up' opening ( though the close is exactly in the gapdown area and not above it). even thoug it failed to move above the opening area, this is still positive, and does open up positive options for Nifty (provided the levels around 11300-350 holds).
Levels around 11350-375 have been posting stiff resistance to Nifty and pushed markets down 2-3 times already . However none of the drop materialized into any major fall/correction and Nifty always managed to recover. Now we have spent too much time around this level which might shift resistance from 11375 to higher levels ( 11550-11600 levels). Ideally, as mentioned in the previous post, we would have liked to see the weekly close above 11385-11400 levels, that would have been a strong indication of markets intent to move towards higher level from here but even though that did not happen still Nifty almost held most of the opening gains so chances of markets moving further from here are still there but like we mentioned above, it needs to hold 11300-11350 now. If markets slips below 11300 then it raises question mark on the overall pattern once again.
Levels around 11350-11400 are pretty important as in Feb/March, Nifty had seen a massive fall from these levels ( all the way down to 7500) so its Natural for markets to see some hesitancy at these levels. Successful cross above this level should rule out any chance of markets going back and re-testing lower levels (8-9K) again in next few moths.
So in a nutshell, todays gapup move countered the gap down move we saw yesterday ( and created a sort of bullish 'island reversal' pattern). If Nifty can manage to hold 11300-350 levels in next few sessions then we can see much higher levels going forward. On the downside 11300 and below that 11110 are the critical levels to watch out for. For any serious correction to develop, we need Nifty to break below 11110 and then 11900 levels. Till that happens, the market trend remains up.
Happy Trading!
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