Nifty has bounced back sharply from the lows of 7960 and was up move another 100 points to close above 8300 levels.
The below research is only a part which is picked up from “The Financial Waves short term update”
Nifty 60 mins chart:
In previous update we mentioned that, “In short, close above 8210 – 8215 is important to start deeper correction on upside towards 8380 level where 61.8% retracement is placed of the prior fall. Also it will be important to see the overall breadth and sustainability if Nifty has another Gap up opening!”
Nifty had another Gap up opening on Friday and touched intraday high of 8263 levels. Prices consolidated within the range of 8200 and 8260 for the rest of the day. ….
After V shaped recovery prices tend to take important support and resistance near Bollinger Bands®. So we have applied this technique on hourly chart. The resistance as per this technique is now near 8320 which is also the previous pivot area and the support continues to be near 7960. The Band width has drastically increased to rise in volatility and should narrow down over next few days giving more accurate turning areas.
From wave perspective, we are expecting the current ongoing move as wave b formation which can retrace anywhere near 8370 to 8470 levels which is the 61.8% to 76.4% retracement levels. However, it will be crucial to observe if prices continue to protect the recent Gap areas. On downside as long as 8080 level is protected the upside correction can continue.
In short, the near term trend is positive for now as long as the Gap area near 8150 followed by 8080 is protected. It will be crucial to see if this rally can extend beyond …..
Now read below the trading strategy we have been giving in our “Nifty trading update” research report:
Mentioned in today’s morning research report “For today, long positions can be created on move above 8265with 8220 as stop and target of 8320.” BANG ON!
Happened: Nifty broke 8265 in today’s trading session and rallied sharply towards 8330 levels.
On December 17th we mentioned that “short positions can be created if Nifty sustains below 8050 levels for 30 mins with 8130 as stop and target of 7960.” BANG ON!
Happened: Nifty touched an intraday low at 7961.35 and bounced back from there on 16th December itself.
On December 14th we mentioned that “If Nifty has a gap down opening then shorts can be created with 8220 as stop and target of 8120. Avoid creating long positions.” BANG ON!
Happened: Nifty moved sharply lower and moved beyond the target of 8120.
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