Spot nifty again open gap down today at 5217.65 and that was the low for the day. It recovered soon after moving up and down the yesterday's close line and made a high at 5260.60 but pared the gains at close of the day to finish at 5238.40. A positive day with small gains but the momentum looks wanning as the bottoms being made near to 5200-5225 levels. The level of 5200 if maintained will mark some recovery for the index as while writing this article the US markets are very strong today. So opening with gap up is possible for the day. If spot nifty closes above the 5257 level then a short term bottom is likely to be made and a close above 5300 level will confirm it. On nifty future charts positive divergence on MACD is seen it remains to be seen how soon it gives the results for the same. Earlier negative divergence has given the fall which can be seen on chart above. The level to watch is 5321 on nifty future crossing it will launch the recovery stage with next resistances at 5352 and 5402.50 . Trend players still need to sit out for more confirmation after recovery starts. As always Friday weekly close is important and close above 5300 will be a relief for bulls after being hammered for last few days. Intraday traders can watch the levels on spot nifty given below to trade on Friday.
No trade between 5220 and 5257(To avoid whipsaws)
Buy above 5257 sl of 5237
targets 5275-5293(add positions, breakout on the upside),
5311-5330-5349-5368-5387.
Sell below 5220 sl of 5240
targets 5202-5184(add positions,breakout on the downside)
5166-5148-5130-5112-5096.
Happy Trading !!!
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