As per our last week article we clearly mention that nifty is having support at 7470 level and it has given some bullish signals near to this levels which lead for up move till 7665 level.
As per the chart development we can see that, it has given a “DRAGONFLY DOJI” candle on important support level, and it was also formed “MORNING STAR” candlestick pattern on this bottom level, so market clearly hinted about this support level, but yes nifty not able to give big up moves, it has faced trendline resistance at upper level which bring the nifty again at same level where it start from for the week.
As of now we can assume that, we can even see a development of “RISING THREE” candlestick pattern also, but yes pattern is yet not developed, and it might take place till the bottom level is sustain.
Now the interesting part is rsi, have a clear look at rsi, price yet not tested bottom of week it left by almost 10 points, but rsi tested the recent bottom level, so if any green candle near to this support can lead for the “POSITIVE DIVERGENCE” signal.
So with the basic technical study we see good support in a range of 7450-7470 range till the time this range is sustaining on closing basis, we can even expect a good bounce back till 7650-7720-7800-7900 in coming days.
Yes but importantly if nifty able to move and close below 7450 level then we can expect a good correction till 7350-7200-7100 also.
So our basic guidance is till the time level sustain one can go long with mention level as stop loss on closing basis, but if close below this level then go for selling with nearest resistance as stop loss.