After a short pause in Nifty’s price action last week, it resumed the upward move. Still in a bullish channel post budget day, Nifty’s upper channel now points out to 8700 mark. On its way upside, it might face resistance at around 8475 (yesterday’s high) and 8633. As long as it trades within the bullish channel, every dip would be bought into. The price action post budget day, has left beneath many gap ups and these are yet to be filled in. These gaps would act as a cushion for the bulls in the near term correction. Investors are advised to hold long as long as the price action is within the bullish upward moving channel.

Let us sit back and analyse the entire move up right from 6825. 6825 was an important technical support level, which is exactly 50% retracement from the entire leg up which was in place from 2014. It was during the day of budget, due to announcement of 3.5% deficit and giving hope for a rate cut from central bank, the market move smartly from 6825. The hope rally began very swiftly. Then came less than anticipated rate cut, however there was still hope as governor said further rate cut is possible if monsoon is normal. We saw the largest drop post announcement in the entire leg up. Hope still continues as soon as MET department announced, we will have better than the normal monsoon, and Nifty moved towards 8400 mark. If you were to analyse, one thing is for sure, the entire move up was built on ‘hope’. Now it is time to test reality. If we can hold on to 6825 in the next leg down, we are going to see another Bull Run in Nifty, if not ‘hope’ would turn out to be ‘nightmare’.

For intraday traders (Nifty Future) try to do jobbing on both the sides of market movement. You can use the levels given below to trade accordingly.