Dated :- 11.10. 2015

                                                                     NIFTY SPOT : 8189.70

Hi,

Readers,

Nifty moved up exactly as was anticipated in my previous blog.

It was expected to touch 8200 till 7880 is protected. And Nifty crossed 8200 and made a high of 8232 to close at 8189. We expected Full body Candle this week and it actually made it. It was also mentioned that Nifty charts is showing strength.

But frankly I would like to mention here that it was also mentioned that Nifty charts are showing very good strength but my special indicators are not showing that level of strength. Normally those indicators either lead the strength or they go with the strength. But this time they were lagging in there move with the strength. Thus I mentioned in my previous blog that although Nifty chart is showing strength but I would like to wait for my indicators to get at par with strength with Nifty. In last 4 trading sessions Nifty is virtually standing in small range is the indicator that Nifty allowed time for those indicators to come at par with Nifty.

Now What :-

Now since Nifty has achieved one target of 8200 the next possible targets can be 8338 and 8394. Keep the trailing Stop loss for the long positions at 8103.

If Nifty goes run through to 8338 or above that level then close long positions and step aside. Because at that time Nifty would be in deeply overbought  zones  in smaller time frame charts. Which can cause sudden correction in Nifty.

On the down side 8050 and 7980 are still very good supports.

Since Nifty is in contraction zone for last 4 trading sessions expect expansion move of more than 100 points possibly in next 2-3 trading sessions. The doji formation by Nifty yesterday is also justifying expansion move.

What if Nifty does not go run through to around 8338 around levels and corrects from here. In that case till 7980 is protected on closing basis, Nifty will be considered to be buy on dips. This 7980 is very important support. This support level has risen from 7880 to 7980 now.

People or Traders may have forgotten two important patterns which Nifty is making. Those are :-

1)   The old Bearish Head & Shoulder pattern on weekly charts is still not nullified till now. Only one week close above it is not enough, it requires more efforts. It is still not nullified either in monthly charts.

2)   Nifty is also making a possible flag pattern on weekly and monthly charts, the breakout of it will be above 8520 around levels closing basis on weekly and monthly. It is very less likely for Nifty to give run through breakout of that pattern immediately. Till now we are not giving much importance to this pattern as of now but just keeping it as information. Because before giving breakout of this pattern it will have to nullify the bearish Head & Shoulder pattern first.

Trade accordingly.

The result season has also started and it can have its own impact on Nifty.