On the first week of 2017, the market has shown strength by closing the important open gap mentioned in the last review, taking out the Monthly High, and closing the next open gap around (8288.55-8296.3), an important sign of strength.

Taking out the Weekly High means by most chances that the market is aiming towards 8720 (but the Stop is below the Weekly swing Low, at 7893.9).

The best scenario for the bullish case would be to see a new Weekly High made, then a pullback down that respects the Weekly swing Low at 7893.9, then a follow through to take out the High made.

If that happens, the way up though is full of strong resistance levels. The nearest Daily resistance is at 8400.5. The open gap at 8460.6-8525.75 is resistance by itself, and includes two other resistance levels – 8477 and 8518. Above is the most important resistance around, at 8543, and two other open gaps – 8598.1 till 8626.25 and 8678.25 till 8691.3.

For the bearish side, we need to see at least a Weekly bearish bar as a potential reversal down before seeking Daily swing bearish opportunities.

 

NIFTY50: Daily chart (at the courtesy of netdania.com)

  

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