NIFY BIG BANG BREAK OUT:WILL NEW BULL MARKET START HERE?

Nifty has broken out on weekly chart and this appears to be very significant breakout backed by strong fund flows.

The Nifty Weekly Chart

Here’s why Breakout appears significant

1. Nifty developed a well defined resistance at 6380 and respected it for 6 long years. When a resistance gets developed over that period of time – it becomes very significant. The Breakout post that becomes very explosive and important. 

2. The Breakout has happened on back of huge FII flows and that makes the breakout backed with conviction. 

What does this mean for Nifty?

Nifty is all set to surge to very high levels. Post Breakout – Nifty can consolidate here before moving higher or it can continue to rally only to pullback later to retest 6400 as support. Remember, post Breakout one can only be BULLISH. 

The Breakout structure will remain intact as long as Nifty trades above 50 week moving average which as of today stands at 5976. It means even if Nifty declines – the bias of buy on dips will remain.

What happens when Index breaks out after a long period of time?

Just Have a look at S&P500 Chart

The Breakout on S&P500 happened after 13 years and see how explosive the move has been in last 6-7 months on S&P500. That’s what happens when index breaks out after long period of time

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