RBI POLICY TOMORROW - DAY OF SUSPENSION BETWEEN WEDNESDAY'S GAP UP & FRIDAY'S GAP DOWN...
(both gaps will provide respective support & resistance... let's see which gap fills up first... though, due to unfortunate incidents of our country along with lurking RBI policy, high chances of the (lower) gapup being filled first)
The gap support is at 4260-40 (SPOT) Ideally, this should act as a strong support today, for the health of the bullish rally of the last week.
Below 4240 ----> 4215/4200
4250 is the bearish pivot for today... as long as SPOT sustains below this, it will be a sell on rallies strategy.
4285 (thurday's low & friday's near high) is the bullish pivot - if spot sustains above this, then we can expect the gap-down band of 4400-4430 to be filled.
In summary,
4200/15 - 4260/40 - 4315 - 4350 - 4385 - 4400/30
and this Table Tennis (TT) between 4315-4350 is on since nearly 5 trading hours since 2 pm of Friday...
a breakout on either side will be sharp, i guess, with other key levels of 4290/4300 SPOT on downside & 4385 SPOT on upside
KAHANI "INSIDE-DAY FORMATION" (NEARLY) KI...
SPOT LEVELS FOR TUESDAY'S TRADING
Due to a tight range-bound trade, the key levels remain the same...
S2 = 4260/4240 (gap band, good level to re-enter longs unless VERY NEGATIVE NEWS FROM GLOBAL MKTS / RBI)
S1 = 4290/4285 (LOD, bears will intensify attack below this level)
PIVOT = 4315 (how can this not be there "4315" - the bullish pivot for the day; bulls will have an upperhand as long as SPOT sustains above this level)
R1 = 4350/55 (HOD, upper band of today's range bound trade, break will give support to BULLS)
R2 = 4385 (good news from RBI can break this; if closes above psychological 4400, then short term trend will turn UP)
DowJones, which seemed ranged on friday, may make a decisive move today. This move may move Nifty till R1 or S1 level; thereafter, only after RBI's policy news will confirm/set the trend.
But since expiry is on Thursday, I reckon that 4200 - 4500 is a probable band for expiry, once RBI's news is out.
Also keep in mind, NIFTY had ended on a positive note (surprisingly, may be coz of over-sold) last two times when RBI hiked rates. This time, a small hike (as a sign of token action) is factored/expected.
Hence, a small hike or no hike will prove to be bullish... but let's not pre-empt the move, and let the nifty levels decide.
One thing also came out from such continous range-bound trades.. always better to short at higher levels (with high RSI) and buy at lower levels (with lower RSI); with strict SLs and profit-targets.