Nifty(5505):
Nifty Daily chart
Indian benchmark indices saw a key reversal day on the indices (see chart above). A new swing high followed by a strong rejection of the new high. This is usually very bearish but momentum points to an unfinished move. So, we will prefer a corrective decline followed by a another leg up.
BUT, if we see a “FIVE” along with this correction, we may have to conclude differently. As shown in yesterday’s chart, the bigger B wave can end either at 5650 or slightly below OR closer to 5975. Yesterday’s high was very close to 5650. Keep tabs on USDINR – if it crosses 49.8 that would the first warning sign for Bulls that things may not be smooth for them.
Supports: 5480, 5325 and 5077 (so watch for correction to get some support here – I prefer a decline 5325 to 5077)
Resistance: 5650