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NIFTY SHOW - SHARP BOUNCE

Nifty closed on Friday at  4891 with the considerable gains of 21 odd points.At opening Nifty have witnessed a sharp gap down opening  of 80 points on nifty following strong global cues in addition to the Rupee depreciating further.The markets took a support of the 78.6% retracement  of 4780 levels.At this point the bulls rushed in and took the markets to days high in the progressing day,and eventually closing the gap.The markets did closed strongly with a bounce but still the broader market biasing bears with 663 advances to 802 declines,leaves a thin line of skepticism about the bounce.
         Since the closed with strong pullback on the last day of the week,and markets still above the support line ,markets are expected to trade higher where they are likely to face resistance at 4979 and 5050 levels.Each of these levels aould be used as an opportunity to enter new shorts subject to we receive a weight of evidence that markets are facing resistance and about to reverse.The 4780 levels could be used as a support going forward.
                                                Taking a  broader view of the markets The markets are quite bearish on month on month basis due to the formation of a lower high.Currently markets are trading above an up trend line as well as above a long respected support of 4770 levels.But the Technical indicators are indicating a negative signs. As long as these levels are sustained the the deep downside seems to be capped.
             For a reversal to come markets must be successful in crossing the short term moving averages,which  will fuel the bulls to take over the bears and climb the mountain.We need to wait and watch closely ,as the markets have broken a seasonal pattern of the MAY month and deviated to bears ,if this time May closes in red then we might expect the markets to fall to a new low by the end of this quarter.Moving forward  if markets sustains short term support level and tread further we might be able to see a levels higher than 5630 soon.Markets are at a crucial stage and seems both-ways,coming time will lay the future path of the markets and we need to follow it unprotested

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