NIFTY – Bear trap on Friday the 13th Mar 2009. Will it continue?
On friday the 13th, NIFTY made a surprising move to end up around 4% higher.
The majority of the shorts created earlier and created at the open were waiting for an opportunity to exit and there were a few waiting to add new shorts as everyone felt there will be a pull back down to 2650 levels atleast. This was the prevailing sentiment and exactly at the time you can see NIFTY made a move from the then day’s high to 2682 levels which was also almost the opening price. It then moved up immediately and we could see that the move had trapped a few bears at that stage also. Then on reaching the day’s high around 2695 levels, there was again a pull back, but the moment that it broke 2695, all the bears were completely trapped and the rest is history.
Given this scenario, there is a very strong possibility that on monday also this move will continue and it can retrace only till 2695 levels and further to 2682 levels and can then bounce to new levels. If on the contrary it breaks 2671 levels and move on to 2650 levels then that can be considered bearish rather than taking it as a move to trap more bears.
Chart courtesy: nseindia.com