Nifty close below 4950 very bearish

Nifty has broken below the trendline which contained the upmove from March 2009 lows of 2800 levels.

Trendlines do work. Notice how a break above the channel in end March signalled the end of the downmove and the start of an upmove as indicated in the chart.

Nifty closing below 4950 is very bearish.

Trading Idea: Short the Nifty if it goes below 4950 and keep 4950 as the initial SL.SL can be trailed aftersome time depending on how the market moves.

Nifty continues its upward momentum

Nifty Futures is in an uptrend, closing the day at 3652. This uptrend started on 20 March when Nifty was 2768. Is this a bear rally? Not an easy quetion. Nifty faces huge support at 3200. If it breaks 3200 it will be a downtrend. Obviously this 3200 figure will change with time.

This recent rally reinforces the need for a stop loss. All the traders who were short on the market without stops are now facing margin calls and still hoping for a test of 2200. Only time will tell if that will happen but the message is "protect your capital". Keep your stops in place.