Trade Set Up 9th April :

NIFTY :

Yesterday though it looks a event-less day , but it has given lots of clues.
Yesterday two major things happened in the daily charts  :

1) Drop in Volumes.
2) Decent Inverted Hammer daily Candle .

When both walk together , a powerful pullback rally arises in a bear market.

Though reversal signs have started appearing I am not keen to drop my bearish counts due to 2 reasons :

1) Weekly Charts are horrible.
2) A GAP filing activity 5550-5450 is pending since long.
A slide in Market should mint quick 100 points to downside while any rally is a kind of dead cat bounce. Like Many I am will be highly skeptical to prefer long than shorts.

What to do ?? How to place trades , which direction the spring will uncoil ?

 I STRONGLY believe a support is no support if it does not offers a quick bounce. It makes me tilt more towards gap filling process. 5550 should path away to 5450 Quick and Fierce ?

Before taking the SHORT trade , we want to make sure the combo of low volumes with inverted hammer is negated :

Literal definition of Inverted Hammer from stockcharts.com  :

"The Inverted Hammer looks exactly like a Shooting Star, but forms after a decline or downtrend. Inverted Hammers represent a potential trend reversal or support levels. After a decline, the long upper shadow indicates buying pressure during the session. However, the bulls were not able to sustain this buying pressure and prices closed well off of their highs to create the long upper shadow. Because of this failure, bullish confirmation is required before action. An Inverted Hammer followed by a gap up or long white candlestick with heavy volume could act as bullish confirmation."

A GAP UP and we could rally upwards.

All SHORT Desperate souls should look for Gap Down or even flat opening. I will take no time multiplying my Short Positions if we open RED for a sweet slide to 5450.

A Gap Up would make me laze at rest till the dead bounce is over.
SS