These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.As was mentioned yesterday, “the orange band around the 4970~5000 should now come into play”. It has hit our target bang on. Whether the Index will hold this level or not remains to be seen. Normally, after such a sharp dip, we do see some pull back.
Therefore, we could expect Monday to test the rising blue line, and then make a move up. How strong would it be is anybody’s guess. But short term trader may take advantage of this expected up move. It also goes with without saying to keep stops intact.
This suggestion is akin to bottom fishing, and readers must be tired of hearing me … warning of the hazards of catching a falling knife with open hands.
The chart still shows a steady uptrend, as is apparent by the upwards sloping blue channel. This last down move has been rather sharp, and later we could see selling at higher levels. If we witness strong buying at higher levels, enough to counter profit booking, we could see even higher tops on the Index.
The scenario which I expect on Monday is that the Index could open with a downside gap, and then strong hands may step in to start buying, which could push the Index upwards.
Even now, the suggestion to buy on dips still remains valid. Traders with a longer term horizon could wait for a formation of the short term bullish pattern to enter long positions.
Trade happy after planning your trade.
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