What will come first 4500 or 5500? Its anybody's guess

What will come first 4500 or 5500? This is a common question being asked after today's upmove. In emerging markets like India, sometimes everything is done to its extreme whether its an upmove or downmove. When bulls are in full charge, they make sure that each and every bear in the Indian markets is killed and similarly when bears are in full control, they make sure that each and every bull is killed.


Nifty View:


This retracement move has to pause to give the next big move. Yesterday i talked about two scenarios, out of which scenario 1 comes into play. On upside there are still 2 resistances left in terms of Fibonacci retracement and those are 4933 (61.8%) and 5028 (74%)


0%- 4538,
38.2%- 4784,
50%-4860,
61.8%- 4936,
74%- 5028,
100% - 5182

4950-5000 won't be easy to cross as around these levels market bounced many times in the past, so what acted as a great support now will act as a huge resistance. It won't be as easy for bulls as it was today to cross 50 dma and on the top of it close way above it.


Dow Jones view:

Exactly same chart pattern was observed in Nifty at 5150 odd levels and we all know Nifty corrected almost 15 % to 4500 odd level. Going by the charts Dow Jones will face huge resistance in the zone of 10300-10400. This rising wedge pattern is a bearish pattern and it will come into play as and when the index gives 2-3 closings below the lower trendline which it is obeying since MARCH 2009





Have a nice trading day!!!

Regards

Ankit