Bullish at the Top

The Index continued its display of strength, falling 100 points in 15 minutes, then quickly recovering from the decline to close almost unchanged. Today’s move reminds me of the bull market in 2003 – 2007 when a market correction could be measured in hours. Perhaps, the next bull run will see prices going up, only to correct for a few minutes.

Before readers get unduly excited at the idea of such a bull market, please remember what happened after the 2003-2007 bull move. If markets go up in a straight line, they usually fall in a similar fashion casuing a lot of anguish and pain.

A steady market is far better for traders than a market which goes crazy.

The Bank Nifty made an inside day yesterday, promising a lot of action. The action came today, with the Bank Index making an outside day. After an outside day, we expect the market to either reverse or remain choppy. Careful here.

The Nifty faces significant resistance at 3150. Once this resistance is overcome, we may see another up move in the market. Now, like all good things, there is no certainty that the market will breakout and that an up move will be sustained. I write this to make sure that we are prepared for whatever the market does. The Nifty could fall back to support, and, then who knows where ? For this reason, a wise method will be to wait for a breakout of the trading range, then buy on pullbacks / dips.