Because last week till Thursday - Nifty was behind the fence of 7540-7600
The resistance is like a fence that blocks the free movement. A person can run to the fence but cannot cross it. It's only when that fence is broken - it gives an opportunity to the market to run as there is no barrier to stop it. The enthusiasm is Children like - run, run.
Nifty was struggling to break past 7540-7600 as it was a stiff barrier but on last Friday, it finally closed above it. And hence, it's no surprise that it made a huge move today.
On Charts - Nifty now has fresh resistance zone between 200 dma and 7970.
That's not all - on any decline - Nifty has a solid support at 7540-7600 zone. Remember - the previous resistance now will become the support.
Here's how Nifty has made the Journey so far:
- Nifty took support at 200 week ma
- Nifty then encountered resistance at 7540-7600
- Nifty consolidated, gathered energy and then took out 7540-7600
- Nifty now has a new resistance to capture - 200 dma-7970
I have covered each of the above instances.
Please read: Why the Pitch matters when it comes to trading?
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Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers