Well, these three days mean the gap between my last post and this one. Usually I write every day, so this has been an unusual gap. No big reason - the market was choppy on Friday, then we have this weekend, so whatever we share could wait till Sunday. Sorry about the delay!
For five days now (all of the past week), the Nifty has been moving inside a range between 4500 to 4600. This range is defined by the real bodies for each day, the range between the open and the close. If the Nifty were to close above 4600 on Monday, this will be a sign of breakout from the trading range. An easy strategy is to buy the Nifty at the close and exit on a move above 4700 which is the target on such a breakout.
The Nifty faces significant resistance in the larger 4500 - 5200 zone. I assume that the strong momentum seen in the past few weeks will now reduce and stocks will be much more rangebound, even if the Nifty were to slowly move up.
A longer picture
The 30 week moving average is roughly equal to the 200 day MA. The weekly average is preferred because a weekly chart allows me to view more data. I applied the 30 period MA to the Nifty weekly chart. The difference between the closing price and the MA is around +1500, meaning the price is about 1500 points higher than the average. Once earlier when the Nifty touched a difference of 1500, it went into a trading range for many weeks wgich was an intermediate top. Have a look at the chart here.