Thursday, May 07, 2009

Mometum Divergence

Nifty is witnessing strong divergence on various momentum oscillator. Yesterday Nifty formed an outside day which was preceded by a Doji Star pattern. These combination pattern signals exhaustion of the current move and combined with heavy divergence it would limit upside in the index.

This suggest long positions should either be exited or trailed. Selling pressure would be intensified below 3500.

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