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Nifty close 8666 points: The Nifty opened the week flat and ended almost near the same levels forming almost a “doji” after 2 consecutive “hanging men” in the weekly charts. We saw the lowest volatility of only 96 points last week. In fact since 29th July 2016 the market has been unable to make any headway despite the overall trend being up, which along with the above candlestick patterns raises some doubts about the sustainability of the current rise. However, one has to wait for confirmation that it’s over and that requires more evidence. The 8716-8845 points range is the stiff resistance area to watch out for at higher levels. We have seen the volatility getting compressed (forming an inside bar pattern) to a level which is unsustainable and a small burst on either side is likely this week or at best in the following week. From a traders perspective 8600 and 8696 are immediate support and resistance levels to watch out for. However, from a directional perspective 8517 is the absolute Stop Loss on longs that the Bulls should keep in close. The safest strategy would be to book profits in rallies to the above mentioned range as the risk/reward ratio is becoming skewed and wait patiently for the Nifty to play its hand.

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