On Thursday the market attempted to auction lower in the afternoon session after it had met with resistance around 5130 levels and was managing to clear the anomalies mentioned in our blog post that day.
The auction however had lower volumes than the preceding day and was an indication that the market wasn’t really ready to break. Don’t confuse that with strength however.
We spoke about an acceptance above 5062 as a new bracket, and the lows were in that zone.
As we look at the new week from Monday, let’s look at the bigger bracket on the Nifty daily chart.
The above chart is that of the Nifty spot. It clearly shows the market approaching the upper end of the bracket ( in blue).
Trade location will be important at the start of the week. There could be traders pushing the market higher to trigger stops which are likely to be heavy in the two zones pointed out.
There could be new buyers, just as easily as new sellers would be waiting to enter at these levels again.
In the Trading room, following OrderFlow as a basis for taking the calls becomes vitally important. Blue and green to support will signal new buyers and red and pink will speak about sellers wanting to come back.
We also need to keep an eye on the reaction theory playing out within the bracket.