The Nifty took some rest, as it paused after five days of strong gains. Such a pause is natural in any trend.
The Nifty has made an Inside Day as well as an NR7 day.
(Hat tip to Rajesh Jain, Rohtak for pointing this)
The patterns suggest uncertainty. Now, the question comes: unceratinty about what? Since we have already seen 600 points of gains in the Nifty, the uncertainty is about continuing the winning spree.
What may happen next?
Scenario One: A move below today's low - 4436, will tell us that the majority of traders have decided to become safe. They are not buying. Then, a correction could easily begin taking the Nifty down to 4350.
Scenario Two: The Nifty continues its winning spree. A move above 4510 - today's high will suggest that bulls remain in full control and confidence. This should suggest a target of 4700 which is the next resistance.
Since the trend is up, there is more risk in selling than in buying. But, we have to follow the market momentum anyway.
For Investors, a corretion is not a cause for worry. After all corrections will come and go. The trend remains up.
For Traders, a move below 4436 i a warning to lighen up or maybe close long positions.