If election results can give markets a 20% upmove in a single day, then any major upset in election results can lead to a correction too

Election results are to be announced for 3 states viz Maharashtra, Haryana and Arunachal Pradesh in the next 24 hours. Congress won in the last assembly elections held in these states, any major upset for Congress in these states can lead to a healthy correction in Indian Stock Markets which will eventually cool off the already overbought markets.

Nifty view: Today markets exactly turned from trendline support of 5050 level which was mentioned in the blog yesterday, after touching a low of 5051.65

Now nifty may turn in bearish mode if it closes below 5050 for 2-3 days with huge volumes because if it closes below 5050, it will violate the trendline which it is obeying since March 2009 and has taken 6 times support from that trendline

Nifty chart is observing a rising wedge pattern which in simple terms is a bearish pattern on charts, so trade with trailing stop losses


Dollar index view: Dollar is weakening against all major currencies of the world as a result of which dollar index is falling down everyday. Euro has touched a new high of 1.5$ i.e 1 Euro = 1.5 $, which was languishing around 1.3$ six months ago, so a major appreciation has been seen in euro against the dollar. Dollar index is now approaching support levels of 74-74.5$ so if it bounces back from these levels, U.S markets are then bound to correct sharply



Have a wonderful trading day!

Regards

Ankit