Corey Rosenbloom: India’s “Nifty 50″ Stock Market Index (NASDAQ:INDY) recently bounced sharply from a critical weekly support level, but not before triggering a Bear Trap outcome beneath the support level.
Let’s start with the Weekly Chart critical planning level and move to the Daily Chart for additional analysis and planning.
From the weekly chart above, we can clearly see the critical inflection area between the simple 5,400 and 5,500 index levels.
In addition to being a “Polarity Level” which means price has reacted to this level both as support and resistance, we see the rising 200 week SMA intersecting the 5,550 area in this 100 point zone.
Despite the importance of the support area, the index spiked down to 5,200 and 5,100 during the last two weeks but closed above this level – in fact, above 5,500.