Sunday, August 23, 2009

Breakout from 4500 resistance

The Nifty finally moved out of three day trading zone, by moving above 4500 to close at 4528. Moves out of the trading range should be respected. The minimum target for the up move is 4590, but a more likely scenario can see the Nifty go to 4620 where it faced resistance earlier on.

Earlier, we were discussing a large trading range for the Nifty, between 3930 and 4730. Now, with new price bars coming in, it is apparent that 4350 has developed as strong support. The range, can now be defined as 4350 to 4730. A breakout from this range gives an upside target of 5110, a number that seems possible, given euphoric market conditions. The summary is to trade on the long side, until 4350 is broken, or new support levels develop.

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