Markets were looking for some major triggers to sustain the up move or adapt a sustainable direction. Looking at daily technical chart of Nifty, it was trading in a falling channel for the last few weeks.
Exit polls in state elections of Gujrat and Himachal Pradesh gave fresh trigger to the markets in last trading session. Nifty saw a major up move after favourable reflection by the exit polls. It broken above the falling channel and managed to close above the upper falling trend line of this channel.
This completed the breakout from the falling channel although Nifty made a bearish candlestick on daily charts. The candlestick had a long upper and lower shadow with opening and closing prices almost same. It was a shooting star pattern which is a bearish signal. It is needed to be confirmed by the next trading session of selling to confirm the bearishness in the markets.
There is good support for Nifty at 10,200 level as per Options data. Technically, to maintain the breakout on daily charts, Nifty needs to sustain above 10310 level.
Foreign institutional investors (FII’s) data is neither supportive nor against the markets as per last trading session data. They were sellers to the tune of ₹ 80 crore in Nifty Futures on Friday. Volatility index has come down slightly lower after the exit polls reducing the fear factor in the markets.
If the actual Gujarat election results on Monday remain as per expected lines, then Nifty may rally up another 460 points. It may hit levels of around 10800. Otherwise markets may fall sharply towards previous lows of 10000.