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An opportunity to buy on dips

Nifty opened gap up with 40 points following positive trend seen in other Asian
markets and finally the market closed with some smooth additions on hopes that
Modi's Bharatiya Janata Party (BJP) was likely to win in both states,. The Sensex
was up 109.5 points at 26108 and the Nifty was up 31 points at 7779

On the daily chart, the index has formed a sizable bullish harami candle stick
pattern. The chart pattern suggests that if Nifty breaks and sustains below7720
level it would witness further accelerated selling pressure which would lead the
index towards 7665-7600 levels. However, on the upside an immediate
Resistance is around the 7850 level and if index crosses above then it would
witness buying which would take the index towards 7900-7930 levels. At current
levels Nifty has closed below its short term 50 day SMA this signals and
supports further downward momentum to continue. Nifty continues to remain in
an uptrend in the short to medium term, so buying on dips continues to be our
preferred strategy.

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