Last Friday after the market closed I had posted a composite chart showing cumulative volumes for the Nifty in the range 5600-4500.
You can find that chart and that post here – http://www.vtrender.com/content/composite-and-orderflow
Based on that chart, we had argued for a move to fill up the low volume region below 5200 right upto 4970.
Here's a fresh chart :
Today's close is exactly at the lower end of the April bracket near 5155- 5165.
5155 is an HVN on the larger composite above which it reenters a balance area which has another prominent HVN at 5212.
Both these zones should get supply, as the seller will try to come back in.
The high volume zone below this is at 4970 region, which should support any move lower.
Monday's trading would have the market absorbing news from the EU zone as well as RBI.
As mentioned in the trading room, headlines are the biggest risk to the market in it's current uptrend.
In case the market can absorb all the news and stay the course then we have a larger move developing into this balance zone which should take the market upto 5380 levels.
Remember balance zones are value areas and the value area rule also called the 80 % rule applies to all situtaions.So it it enters this zone and stays inside for a few hours, it would make it to the other end of the range in 8/10 cases ( 80 %)
The sellers best chance is to step in on Monday morning as an open drive and push the index lower. If that does not happen, we see the market go much higher.