On Monday, we were watching 5170 as trend decider level. Nifty restricted its trade at 5160 levels and thereafter, witnessed continuous two day’s fall at 5011 level, forming falling gap in between 5084 to 5057 levels. Yesterday, again, Nifty closed with negative bias at 5037 with loss of another 80 point.
The Nifty has formed a bearish continuation candle with long lower shadow. The long lower shadow of candle implies that sellers drove prices lower during the session but strong finish indicates that buyers regained their footing to end the session on strong note. In this kind of scenario, the level of 4990 which is acting as important support level for the day as 38.2% retracement level of entire rise from 4720 to 5169 level will play important role as “trend decider” level for the day. In case, if Nifty succeeds to hold and sustain above 4990 level for the day then we will see pullback in Nifty. In this case, Nifty will attempt to fill the yesterday’s falling gap of 5060-5080 level. However, failure to sustain above 4990 will lead continuation in downward move in Nifty around 4950-4880(temporary correction) level.
(Remember, 5330 is 61.8 % levels of entire fall from 5700 level which we mentioned as “X” wave’s maximum target. Only sustainable move above 5330 levels will open the possibility of “B” wave…rare, as ABC pattern has ended in channel ( see weekly chart )which gives surety about current move from 4720 as wave “X” and not a “B” wave ….….as per the possibility of X, it could be the subdivision of x wave in the form of ABC Flat pattern…the current fall from the top of 5169 dated 08-09-2011 could be label as “B” of X as a triangle…and rise from 4728 could be label as “C” of “X” which wrongly stated as “C” of Triangle )
Support :- 1) 4990 2) 4960 3) 4930
Resistance :- 1) 5170 2) 5200 3) 5230
Buy Coal INdia @ 334 or oin dip at 328 sl 322 trgt 355-362 (7-8 days)