Dated :- 05.02. 2017                                 NIFTY SPOT : 8740.95

Hi readers,

Nifty has moved up on expected lines and it has given respect to the Island reversal pattern mentioned in my previous blog, as it took support at 8537 near to the Island reversal pattern on budget day. Readers would be remembering that Island reversal pattern is on till Nifty is closing above 8480. Actually the pattern is placed with the gap between 8480 and 8494. Thus Nifty taking support of the pattern on budget day is heartening and important.

Now What -

Now Nifty is still looking good.

But I would like to caution here also as now it is the time to be on your toes.

The kind of pattern Nifty is in we want to have run through move in Nifty. Without any pause and not much downside.

The beauty of this kind of pattern is that Nifty very rarely makes two big red candles. Means consecutive back to back two down days are not made by Nifty normally, and thus, At any point of time we get the signal that it is about to make two down days on closing basis exit the long positions and step aside.

Therefore, one thing is, that, 8650 on the down side is going to be very important support on closing basis.

As I mentioned above that I would like to be cautious also here is that I am interested in playing further up move in Nifty for next two days only that too if it goes up run through without going down. As the charts are getting stretched which means that we should be on our toes. Correction in Nifty is also near by.

Now the all important point is what to do.

Keep in mind the level of 8698 till then Nifty is above it look for buying.

Also the comfort zone of buying is above 8752.

As any up move has to be run through means if Nifty moves above 8752 it has to move fast up towards 8840.

If it is not moving fast up and goes below 8698 exit the long position and even look for selling below 8698 with the stop loss of 8752 Nifty spot even on intraday basis.

In any case I am a buyer only for next two days or till 8840 is achieved which ever is earlier. Book full profits and step aside in Nifty.

Because after that the stretched charts can force Nifty to correct.

Strategy is 8650 closing basis is final trailing stop loss of long positions and we want to trail it further to very tight level of 8698.

Since the condition of move up from here has to be fast and run through we want Nifty to stay above 8752 always.

At Any point of time Nifty goes below 8752 be vigilant because it is then trading is non comfort area. And exit long position at 8698 and step aside.

Below 8698 Nifty may correct further.

Also at or around 8840 or latest by Tuesday in case of a run though move step aside because after that Nifty may correct as it has started getting stretched.

Trade Accordingly.

Note - ALL THE LEVELS ARE OF NIFTY SPOT ALWAYS.