Beginning of uptrend in Nifty? – Nifty View 8- 11 March

I will try to explain whether this is a beginning of trend reversal in Nifty. 

Last week we had discussed about how major events can be 'reasons' for trend reversals. All of us know that Nifty is in downtrend. As indicated in my last post, a sudden rally of more than 400 points in Nifty is indicating us something. Global markets traded on positive note, last week. However, Dow is trading near its resistance. Holiday on Monday means, Indian markets will take a pre-opening cue from global markets on Tuesday. 

Do we trade long (buy) only in this scenario? 

Technical Overview: Last week Nifty made high of 7505 and low of 6825 to close near high of week at 7485. A range of whooping 680 points forming a big bullish green candle. This sudden move is giving us an indication that bulls are strongly in action. However we do not have substantial evidence to confirm this as a trend reversal. On daily chart Nifty will need to close above 7600 to consider this as medium term trend reversal. Secondly if Nifty move below 7035 this view (of upward reversal) will be negated. 

Nifty has resistance near 7510 & 7540 level. New support is formed near- 7240 and 7000   

My View: On daily chart Nifty is trading near resistance. Markets can not go up one way. This resistance can bring Nifty down to the support level of 7240. It would be interesting to see – 1. Whether Nifty gaps up on Tuesday beyond point of resistance. 2. Nifty moves marginally down from the current resistance. I would want to go with downward movement. 

Note: Do not consider these as buy or trade recommendations.  

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Check the influence areas (supports and resistance on chart below)