1. The rally has reached a crossroads now. The markets have retraced by 73 pc the fall from 5944 to 5195. They have kissed the 200 SMA and corrected. Sustaining above 5750-5800 means a new new bull run has started.
2. The Indicators like Stochastic, RSI on a shorter time frame all have given sell signals. This implies at least a correction to the whole up move from 5196 to 5740.
3. If its merely a correction then targets could be 5532, 5468 and 5404.
4. 5605 was a resistance many times and will be a support now. The largest correction has been 95 points so far in this up move. So below 5635 we can expect steeper fall.
How do we play it?
For fresh upside wait for the 200 SMA to be broken. This comes at 5742. This is crucial because previous high of this rally also is at 5740.
On the downside, 5635 followed by previous low at 5610. So, we wait for breach of 5600 for shorts.
Supports will kick in at 5588 and 5543.
Trade light and wait for decisive signals.
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