Disclaimer: These are my personal musings and only meant for entertainment, not as trading advise. To view the full chart, right click on the thumbnail and open in a new window.The Nifty is back in the “Zone”.
From the manner in which the Nifty is moving, we surmise that during the beginning of last month, there was cautious optimism. Later, there was a shakeout of the weaker bulls, who were leveraged to the full.
Once they were out of the system, we see that there has been a sharp bounce back up. This move may not have allowed the bulls to re-enter, due to the swiftness of the move. It does seem from the last three days, that accumulation is happening. The bulls are not allowing the price to fall beyond a reasonable level, which could make recovery impossible. Further, the sidelined bulls still seem to be waiting for a substantial correction, to enter long. These bulls, who have missed the bus, will start chasing the price, which could further fuel the bullishness. And as is common, they will be left holding the baby at higher levels.
At present there are no panic buttons being pressed, either by the bulls or the bears.
Both the camps are adopting a wait and watch attitude.
The dice still seems weighted in favour of the bulls at this point in time.
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