Yesterday the markets cracked yet again to retest the lows below the 5940 mark to the 5925 levels, and with this the Gap made during the last of the January FNO series has been partially been covered and it remains to be watched if the complete Gap poised at the 5908 would be covered today or not.
As pointed out in my Outlook yesterday the Indices are crucial support line called the trendline which is at the 5880 levels for the time being and this trendline is important and crucial since the same has been a major long term trendline breakout that has been created post the breakout of the 5400 mark during the last year.
And the technical charts are indicating clearly that this trendline should hold for the current undertrend which is bullish to stick on for the 6240 levels to be reached but if that levels of the 5880 is breached then 5600 cannot be ruled out in the near future.
Since technical charts are purely the market synosure which points out the likely events based on historical data, it would be the best to follow them, which currently are indicating that those who had missed the previous rally can take some long positions with stoploss of the 5870 levels for time being and those who are already long need to maintain the stoploss of the 5870 mark for all their long-term long positions.
For the bears it is not the idle scenario to short at current levels and it would be worthwhile to wait for the pivot levels of the 5880 to crack to take short positions and till then it would be best to wait on cash …..
(Inputs: Mr. Hemanth.V, Faculty TA, Stock Market Institute – Bangalore)