The index conveniently stayed buoyant the first half of the day before breaching the resistance @ 30600. However, given that the hurdle was a significant one, a short-covering rally should have followed up but the index stopped at a minor resistance of 30800 before reaching the target of 31000, also mentioned in yesterday’s post. The 1 wk avg. has moved up to 30200 and the index might very well be rangebound given the calm before US Fed Reserve's int. rate decision coming up next week.
LONG, if the index sustains above 30800 for a target of 31000. A decisive breach of 31000 would lead to a huge short-covering rally. In case of a gap-down if the index takes support around 30600, one can initiate a long position for 30800-31000.
SHORT, if the index fails to breach 30800 and trades below 30700 for targets of 30600-30450-30200. However, a breach of 1 week’s avg @ 30200, and failure to recover, will bring the index down to test its trend support around 29600.
LONG, if the index sustains above 30800 for a target of 31000. A decisive breach of 31000 would lead to a huge short-covering rally. In case of a gap-down if the index takes support around 30600, one can initiate a long position for 30800-31000.
SHORT, if the index fails to breach 30800 and trades below 30700 for targets of 30600-30450-30200. However, a breach of 1 week’s avg @ 30200, and failure to recover, will bring the index down to test its trend support around 29600.