Take a deep breath..................... Think

The rally was expected yesterday-- all the indicators were highly bullish, but that streak of uncertainty I had was squashed quite badly. Once again the run-up was beyond any of the expectations I had. It took on the first resistance as suggested by me at 4315 Nifty -- and then went on till the 50% Fibonacci level that is 4489. Though it did tested this level and went up to 4494 but it could not sustain and fell back to 4477 that is just 12 points down. the next Fibonacci level is 61.8 per cent and stands at 4636. Can we now teach this level -- my heart skips beat to take sides now. It may -- it may not, the run-up has been too fast and too much.

All the same the global indications still remain bullish with Europe closing green, US wavering but closing green and Asia dancing in green but showing signs of giving up some gains. After all this rally has been five days old now and frankly expect oil and some reformist statements we continue in same times.

As far as the candles are concerned MACD remains extremely bullish, RSI is bullish, slow stochastic bullish but now in overbought territory, volumes yesterday were above average, TRIX is still looking up and ADX is bullish. Now the caution buttons -- the StochRSI is highly overbought for last four days and jaggu's TRIN says bearish. With all this a green opening is perhaps a foregone conclusion but where do we go from there? if it turns out to be a black candle today then a reversal to this trend is certain. However if we continue this journey upwards then touching the 61.8 Fibonacci level is a possibility. Around this level is also June 17 high. To believe that we will violate these levels as easily as we have done the 38.2 per cent Fibonacci level would be naive. Remain cautious and keep stop losses trailing.

Best of luck for today -- there may be some selling pressure on the corner.