These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click on the thumbnail on the right, and open in a new window.
Contrary to expectation, the bears were indeed able to flex their muscles today. They also managed to close the rising window of yesterday. The bulls, however, managed to restrain the bears by keeping the Index above yesterday’s low of 2920. The Index went into a narrow congestion zone of 20 points in the last three trading hours.
The roadblock overhead still holds.
Now, let us take a look at the second chart. I have marked out the various peaks and troughs. I have marked out how the peaks and troughs were behaving in the last fortnight or so. After making a couple of higher troughs and peaks, the Index has continuously been making lower peaks and troughs.
Today’s low has been higher than the last trough. Therefore, for a bullish move to resume, today’s low of 2930 must be respected. Failing which, we can assume that yesterday’s sharp upward move was yet another bear market rally.
That means we could even see a projection level of 2880 to 2851.
The positive divergence confirmed at the 2920 level suggests that today’s bottom could hold, and we could see a bullish uptrend resuming from Monday.
It does seem a tricky situation to trade in, but then, trading in such volatile markets is never easy.
Trade happy.
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