In markets, traders have sharp memory. Once they find - that a particular level is becoming a problem - they tend to back off from that level till there is sufficient reason not to do so. That's how resistances develop and become significant barrier.
Here's Nifty Chart
As you can see in the chart above - Nifty has developed a significant resistance at 7970. The resistance now has been in play since November 06 2015. It means a fence in place for about 5.5 months, and as more and more time elapses - the level will only gain more publicity.
In Bull markets - every resistance succumbs to strong buying and this will too. But till that time - one should be prepared for noise and caution till its taken out.
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