If we can observe, that Nifty has made a Gap down opening down opening on 5/08/2011 and then again 08/08/2011 , however the same day nifty managed to cover the Gap in Intraday period, on 09/08/2011 Nifty although again opened with Gap down for the third time, but eventually it made a belt hold line and closed making a strong note.......
I expect the market to bounce back on 10/08/2011, however expect the bounce back to be short lived till 11/08/2011 and the Nifty will face a resistance at 5250-5300 levels, which is the gap that Nifty created on 5/08/2011...Important point to note is the Gap will now act as a resistance for Nifty and one should use every rise to 5200 levels to cover their position and new shorts can be built at 5225 levels...
If you look at the Weekly chart of Nifty, after a period of three years, 14 week EMA have convincingly crossed the 34 week EMA and 54 week EMA, it earlier managed to cross the 34 week moving average from above but still it was not a proper signal since it had not crossed the 54 week EMA.
You can clearly see the magnitude of downfall in Nifty once these averages were breached..... the Nifty will continue to be in the Negative territory for the next few months now and its first support will be at 4800 levels. any pullback from here should NOT be seen as a BUYING opportunity but opportunity to SELL.
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