After Uttar Pradesh and Uttarkand Election results, street expectations are getting extremely positive as majority of the traders and investors community hoping markets set to gap up after BJP’s landslide victory in Uttar Pradesh. Also Data released by the CSO last friday showed – industrial production (IIP) rose 2.7% in January after contracting by 0.4% in December which adds more fuel to the extreme positive sentiment. Lets do the top down analysis to understand the current state of the market.
On the daily timeframe consolidation is seen for the last 7 trading sessions. Both Nifty Futures and Bank Nifty Futures are showing an intraday selloff in the first half of the session followed by second half of intraday recovery from the bottom for the last 7 consecutive trading sessions. And moreover Nifty futures is currently at the visual resistance zone @ 8835. so far Nifty Futures is struggling to close above this visual reference level.
If you are trading any charts to get a clear view about the trend it is good to start with Dalton’s Top Down Approach. In the top down approach we will start the day by looking into the monthly, weekly and then daily to understand the overall state of the trend. From top down approach one can understand the state of long term trend, intermediate trend, short term trend and gives you a fair perspective about the market rather than doing a bottom down approach. Lets understand the state of trend with Nifty Spot Charts and the sentiment associated with it.