Exit of Britain form European Union has left the world economies in a big worry. The quantum of effect of Brexit is much lower on Indian Economy as compared to the world. Traders / Investors in Indian markets have much less reasons to worry and the same is exhibited by Nifty's recovery of more than 100 points from the low point on Friday.
How should one look forward to trade Nifty post Brexit News?
Technical Overview: Last week Nifty opened at 8115 and closed at 8088. That was hardly a range of 27 points. On weekly chart Nifty has formed a spinning top. This spinning top has come at higher end of the curve. A spinning top indicates neutral sentiments. However since it is near resistance, it might want to hint us at the possible change of trend. The fall in Nifty can be looked as the correction in an ongoing uptrend. On daily chart Nifty has smartly recovered from traditional support of 7940, forming a bullish hammer candle. Overall setup indicates that bulls does not want to give up their control. This is still a buyer market.
Supports are 7940 and 7880. Resistance is at 8100 and at 8140.
My View: In my last posts I had mentioned the support at 7990, this support has now played and markets recovered from there. We have also been talking about buy on dips in every opportunity. But, with Friday movement Nifty's upside is currently capped at 8200. Nifty will find it difficult to move beyond this level. Nifty can move further up from current levels, but may not sustain at higher levels and can test the current bottom of 7940 once in times to come.
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I have enclosed the chart below to understand the levels on chart