Posted By : Kishore B.S
Hi Friends !!!!
The markets as envisaged opened on a positive note yesterday, very near to the prominent resistance level of 5120, which is the small upper line as earmarked in the charts below. And with the momentum yesterday the charts have formed 2 important points, one being that they have closed above the hurdle of 5040 which had not been crossed for long time now since May.
Second being that the Indices have failed to cross and close decisively above the 50% FIBONACCI level of 5082 and also the important resistance level of 5126.
With these 2 indicators the question props into the minds of the investors and traders that, the bulls might have come to terms of exhaustion or this could be a minor blip in upward trend, which does happen after sharp rallies similar to that witnessed in the last 10 days where the Indices have appreciated by more than 5% and profit booking sets in due to negTative newsflow and after some blip the uptrend continues.
The charts below are indicating similar pattern of blip in the upward trend, as long as the 5000 levels are held in the next 2-3 sessions. If that support zone is breached we are sure to head towards the next time tested support level of 4800 in the days to come.
In light of these circumstances it would be advisable to buy on dips with stoploss of 4980 and conservative targets for profit booking which could be the resistance levels of 5082-5120 for the next few trading sessions.
(Inputs Mr. Hemanth .V, Faculty TA, Stock Market Institute, Bangalore)