Wednesday, January 28, 2009

One day rally ?

For Day Traders / Swing Traders
The Nifty rallied on Tuesday, justifying a buy suggestion given on Monday evening. On Tuesday, the Index opened at its lows and closed at its highs. This one day pattern is either (a) continuation signal in an uptrend, or, (b) likely resistance in a downtrend. Since we are in an intermediate downtrend, tuesday's price action suggests resistance is likely to come in on wednesday. The strategy should be to sell into strength. Strength may also be defined by a mildly 'overbought' position in intraday oscilaltors. Professional traders might like to develop this concept further.

For Everyone:
The Nifty has been making a pattern of lower highs, lower lows. The previous high was made at 2870. A close above 2870 will change the intermediate trend to up. Any rally will again face resistance at 3150. The target for the current down move is 2450.

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