FRIENDS
after a very very long time we saw a huge rally surprising mkt players whose mind set was expecting bearishness (incl me).lvl of 6500 is being discussed by all tom harry and dick.seems shorters are trapped today and short covering wth losses must be there.

first positives: today we have crossed 100dma and closed above it. so far after correcting from 21206 all the times we have reached around 100 dma we have corrected by 25-30 percent from there.let us c this time what happens. will we sustain above 100 dma?

today first time trend line connecting 7697 and 8631 which was giving strong resisatnce so far is crossed over and we have clsoed baove that t- line.

will we sustain above that t line? look at attached chart. today we have tested a line in rsi. that line has given strong resistance since top of 21206. yesterday i had mentioned abt it indicating that since it was not tested some bullishness is left out.let us c this time. will we sustain at this lvls. i had mentioned abt macd also still it is not crossed.

we have crossed downward channel after a long time and we have moved up by more than 80% of fall from 9725 to 8047, so we have think in different manner. now we shd look at retracement lvls of fall from 10470 to 8047. so far we have retraced by 58% of fall very close to 61.8% lvl at 9544.let us c.we will see abt waves after we complete this move.

we have filled gap at 9213-9279 which was unfilled since long.

what next?

for intra day charts we have to look at trend line connecting 10945 and 10470 will give resisatnce around 9700. and on closing basis chart we shd look at rectangle chart i had sent earlier.lvl wise technically any close above 10470 will reverse the trend from bearish to bullish.

i had mentioned abt gann turning day. today was gann turning day.last it was on 9/02/09 and 10/02/09.we saw intermediate high of 9725 in those days. normally these days levels work for apprx 40 dys.today's low of 9040 shd observed for any weakness or bearishness.any gap opening will invite correction bcz so far we had seen 3 gap openings so next gap opening on higher side will be inviting good correction.

so better to be on sideline for few days and let market decide where it wants to move.fight of bulls n bears will be at peak in coming 2/3 days since F n O expiry is on thursday.

Pankaj Shah