The Five Day Rally.

A blistering rally in the Nifty has seen gains of over 250 points in five days. To see this in perspective, the Index gained about 5% in five days, as compared to a bank deposit which fetches 7% in a year. The gains are a lot.

It is fair to assume that momentum will fall. But the gains may well continue with the Index inching its way up, adding a few points every day. Thus, Index action could be a trap for short sellers. There is always a caveat to our analysis. Volatile markets can do anything, therefore our scenario may face difficulties in case of sudden news flow.

All of us have our eyes fixed on a resistance zone between 5300 to 5400. Many fundamental analysts believe that the Index does not have the strength to overcome this resistance. But, who knows. The trend is up, so we assume that markets will reward bulls. That’s the way, short term traders should plan.

Think Crude

The Talk Of The Day Is Crude Oil. We may have started a process of higher prices in crude. To get a feel of what crude may do, watch this video :
Crude: Talk of the Day

Apart from stocks, traders should focus on commodities and Forex. Here is a review of the Gold market with special focus on candlesticks
Japanese candlesticks and the Gold Market

This is Wednesday morning. The U.S. markets were up 2%. Indian markets are already outperforming, therefore we should expect more gains today