The Nifty rose 1.17% or 83.30 points to 7,200 points. Indian stock markets rose around 1% on Thursday indicating a second straight day of gains as mining and energy sectors boosted due to rising crude oil prices.
As we can see the chart, Price action showed some interesting developments in Nifty – starting from the day’s open around 7,175. Well if you remember, yesterday in my article I pointed out important key level 7,100, which also happens to be a radar level. Nifty opened with a noticeable gap above the radar level 7,100. Now this is sign of strong bullish force and dominance of bulls in price action.
After testing resistance at 7,210, Nifty went into a fractional consolidation until 11.00 am. A second test above the resistance at 7,210 resulted in strong rejection of price movement, indicating the willingness of sellers to defend the key level. But soon selling pressure met with consequent interruptions, when price came near the previous gap. (See the Price action in yellow mark) Interestingly enough, these interruptions started when Nifty crossed 7,175. This shows the presence of Bulls and their convictions to buy at the bottom. Now an astute price action trader, noticing this price movement should’ve initiated long positions.
When price action tested the key level 7,130 at 2.25 pm, Nifty bounced back and raised sharply, retracing earlier losses before ending the day in a break even mode. Nifty paused at 7,200 – which is a next radar level. The most interesting aspect in today’s price action is the strength of buying pressure which retraced the earlier losses, within an hour before the market close.
The entire day, bulls showed their presence everywhere, even when nifty closed in an uncertain mood. Watch the price action after tomorrow’s market open and between key levels 7,200 to 7,175. Traders are advised to keep an eye on visible support and resistance levels. (See the chart for important support and resistance levels.)
