As expected yesterday nifty opened mildly gap up to test the 20 day and 50 day moving average crossover resistance of 4280-4300. During the day the trend was very choppy which is typical for expiry week. Nifty tried to break the Fibonacci retracement level of 4268 (which was mentioned in yesterdays notes) three times but could not succeed.
The way market closed at the low of the day suggests exhaustion of upward momentum and weakness in the upward trend. Also it has to be noted that whatever rally we say last week from the low of 3800 was held with the help of nifty heavyweights like Reliance Industries which also shows weakness in the charts.
Yesterday US market had a one way slide and closed at its day low with most of indices are down between 3 – 4%. Asian markets are trading mixed. On the backdrop of whatever happened in nifty and US market yesterday, expect a gap down below 4200. Nifty may take support near any of the levels of 4141, 4110 or 4051.
Happy Trading !
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