Posted By : Kishore B.S
Yesterday our markets displayed some strength during the last hour of the trading session where the session was marked with huge volatility due to the IIP data.
In-spite of the weak and lower than expected IIP data the markets seemed focused towards the higher side of the Indices at 18000 and 5228 the key resistance levels and co-incidentally the higher levels during the last few days as well.
After the Initial hiccups the markets rallied during the last hour of the trading session thereby holding the hopes of the bulls that the rally is still intact and the higher levels could be reached soon.
However the charts are Indicating that the Indices are likely to face huge resistance at current levels that is 5420-5440 which forms a double top technically from where the Indices have retraced downside earlier as well and unless this resistance level is not taken out the rally is not sustainable and there could be a profit booking to some extent.
Though this could turn out to be true yet the Indicators are pointing out that the rally could sustain if the 5400 level is held for today and if the FED statement turn out to be positive which is scheduled for today evening could further trigger the upside to the 5600 mark in a session or two.
All can be said and evaluated but the decision can be taken only if the 5400 level is held for today and if we cross the 5440 mark to indicate that the trend is clearly up and we could further inch up. Till then it would be prudent to wait and let the direction shape up.
(Inputs: Mr. Hemanth.V, Faculty TA, Stock Market Institute – Bangalore)