NIFTY: Three Bar Pullback Setup Hints Continuation in Current Uptrend

Nifty has been trading in a down sloping parallel channel and selling pressure occurred near the upper line of this channel. Once again nifty is showing some strength after completing 3 bar pullback on daily chart. 20 days EMA is providing good support to bulls and now nifty is trading above its 5 days EMA that stands near 8396. Stability above 5 days EMA indicates strengthening bullish momentum. MACD has climbed above center line and now it is testing its signal line from above. MACD reading above zero line remains supportive for nifty bulls. Based on 3 bar pullback setup today nifty has triggered a buy trade by crossing Friday’s high and suggests continuation in on going uptrend. Areas of 8390 and 8340 will remain crucial to watch out. 2 or more close below 8340 zones will hurt this bullish setup. Resistance is now seen near 8560 and then at 8800 zones. Currently trading at 8432.

Recommendation: Fresh entry can be taken on declines near 8400-8370 with stop loss below 8300 for targeting 8530-8700-8800 and more upside in short term.

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