Date  17.04.2016                                                   Nifty Spot 7850.45

Nifty rebounded from support levels of 7525 and as soon as it closed above 7652 it accelerated the pace and closed the week at 7850.45.

Now What :-

Now Nifty has closed at 7850. It has broken out of the range and tussle area. It is well on course to break 200 DMA which is at 7872. Weekly trend line is also placed at 7889.

But the indicators are not in line with the Breakout. Means indicators are not supporting breakout and not giving clear signs that it will carry on run through. Which means that either the breakout is not real or Nifty will spend some more time in a range to allow the indicators to support and justify the move. Means that in both the scenarios it may well be the time to gradually close the long positions and wait.

In the moves when indicators does not support the move it is the normal behavior of Nifty when the price moves in one direction sharply it has the tendency to break the levels sharply to give false impression. These things often happens with good or bad news as the case may be playing its role at that point. Movement of indicators are like oxygen to human being or like safety net. If the price move with indicators then the move is safe and secure and can be relied upon. And if they does not support the move then one has to be suspicious.

Nifty Mid cap index is also approaching resistance area. Combination of all above indicates, that, I would not be a fresh buyer now. After some more points in Nifty i.e. Around or near 7950-8000 with such a kind of indicators location and setup. I will not be interested in buying and chances are high that Nifty will come down ultimately.

However if Nifty wants to go up further from those levels then the conditions are that it needs to consolidate there at higher levels and allow the indicators to gain strength. And if that happens I will be comfortable in taking long position there. But till that does not happen, with the currents setup of indicators sudden and sharp correction is more likely.

Strategy is to close the long positions and look for selling opportunities at higher levels. If Nifty does not correct from higher levels and starts consolidating at higher levels then I am open to idea of buying again.

 In case of run through move in Nifty towards higher levels without consolidation I would look for selling possibilities.