February 5, 2015

Market outlook

Today markets formed an outside bar - this happens when current high is above previous day's high and current low is below previous day's low.

Normally this is considered bullish but for this we will need confirmation by way of trading above today's high (8840 spot). Break of 8680 spot can lead to more weakness but expect support near 8620 spot.

In other words, consider trend as down unless we get a good close above 8840 spot.

Option writing points to resistance at 9000 levels.

EOD charts:

Intraday charts

Breakout from first box was a buy signal which got stopped out when nifty closed below the second box... missed the short trade.

On hourly charts, nifty failed to close above 8840 spot so trend is still down. If this had happened followed by the selloff, then it would have been a bad whipsaw.

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