Spot Nifty was sideways for the day crossing above and below the closing level of yesterday. Suddenly at 1.00 pm it broke out on the upside to high of 5721.10 close the day at 5708.05 giving some relief after a fall from Friday. Its a corrective bounce back which can turn again down by reversing. On hourly charts of nifty futures we see the price action following a downward channel and bouncing from the bottom of the channel with a positive divergence on RSI intraday. The top was given the negative divergence marked on the chart. Also the price action ie bounce is hitting the red bollinger band level and also hit the 60 level on RSI. For the move to sustain it should move this red bollinger band level of 5741 and not breach it. It should be supported by RSI crossing the resistance of 60. So sustaining below 5741 the move may fizzle out and try to reach the central band at 5554.So supports on futures are at 5628-5554. and resistance above 5741 are 5818-5895.
No trade between 5689 and 5727(To avoid whipsaws)
Buy above 5727 sl of 5707
targets 5746-5765(add positions, breakout on the upside),
5784-5803-5821-5840-5851.
Sell below 5689 sl of 5709
targets 5670-5651(add positions,breakout on the downside)
5632-5613-5594-5575-5556.
Happy Trading !!!
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