July 16, 2014

Market outlook

Markets close in the positive for the 2nd day in a row. Within a downtrend, 2-3 days of rally is allowable.

Tomorrow is the 3rd day and day after is Friday.

Expect resistance near 7700.

Note that if the earlier view of H&S pattern is correct, then the rally should terminate within 1-2 days.

Intraday charts:

On 5 min charts, we had a gap up opening confirming the bias as up. Crossover above intraday resistance at 7570 spot was bullish.

On hourly charts, we have resistance at previous swing high of 7730 spot.

If you are already long while attempting to play this 2-3 days rally, your SL will 7530 spot.

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