The Nifty 50 View : Very Short Term

The Nifty today opened on a slightly positive note with the Asian markets giving mixed cues today morning. Nifty went above 8300 but couldn't sustain and fell to the lows of 8233, finally ending the session 8243.80, down 30 points for the day. Nifty has been trading
in the broad 400 point range of 7900-8300 for the past month and a half. It has managed to hold 7900 on downside and 8300 has been a resistance on the upside.

The zone of 8270-8300 is supply zone for the Nifty and only a close above 8300 will allow for next move towards 8330-8400. Today's high of 8306 also marks 38.2% Fibonacci retracement for the fall from 8967 to 7896. You can read more about Fibonacci Retracements here: http://www.investopedia.com/terms/f/fibonacciretracement.asp

The chart below shows the Fibonacci levels for the recent fall from 8967. Notice how the Nifty makes an exact high of 8306 close to fib 38.2% level and reverses from there.


Unable to cross 8300 in the next attempt can take us down to 8150 levels. Buying into the Nifty is advisable only if it manages to close above 8300. Till then, all moves towards 8300 should be sold into.

In this article we have only talked about the use of Fibonacci retracements in isolation. This technique may be used along with other indicators such as MACD or RSI (try learning about them before we use them in upcoming blogs :D)

Happy Trading! 
Capital safety is as important as Capital appreciation!

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