Today is the third day of rally, with the Nifty breaking out of the 4970 - 5150 trading range, closing at 5198, decisively above resistance.
The Index has made a pattern of higher highs, higher lows, which is the sign of an uptrend. The Nifty had earlier broken down from what appeared to be a rising wedge. A rally has now brought prices near the apex of the wedge (5200), which is the make or break level for the wedge.
How do we trade: Assume that the trend is up. Wait for dips to go long. If this is a bull trap, which means that there is a false breakout, then traders will be confronted with losses, hence our suggestion to wait for dips before going long.
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