After the 3 relative volatile months of the first Quarter this year, April has ended as a consolidation small range bar, closing in the middle, on the down trendline BD (chart1). The reaction that has started this year completed 50% retracement of the major bullish wave that has started since the end of 2011 till the start of 2015, point C (chart1).

Also, pay attention to the monthly 50SMA (the blue line) serving as a support for the price at point C (chart1).

NITFY50-M-30-APR-2016

Chart1: NIFTY50, monthly chart (at the courtesy of Netdania.com)

Important highs over this area have already been taken out, so we might expect a deeper reaction towards the Weekly 20 SMA (mid Bollinger Band).

Currently there isn’t any clear indication as for the daily/weekly timeframes. The last bearish setup the market gave has reached its destination at point C (chart1). Since the price has already taken out major daily highs on the current area, there are more chances to see a deeper reaction towards the 20 SMA, the mid Bollinger Band, on the Weekly timeframe (chart2).

Major support (blue) and resistance (red) lines, lines that might change course for daily and/or weekly swings – are shown on chart2 (exact values are printed to the right).

NIFTY50-W-30-APR-2016

Chart2: NIFTY50 Weekly chart  (at the courtesy of TradingView.com)

 

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