Good follow up and consolidation today on yesterday's gain and the market seems on its way to a solid rebound. We already argued yesterday, any weekly close above 5900 would squeeze the bears hard. But before that happens, have a look at Nifty future daily chart ( as on 6th March'13 market close ).
Multiple speed-breakers lie ahead. First the downward sloping trend-line corresponding to the recent downtrend that started from 6100 level. Second the already existing resistance of around 5860 level and last but not the least, 20 DMA , which is supposed to act as a resistance.
Now have a look at the above chart. All three factors are almost coinciding around 5860-5880 range. Therefore, bulls have their task cut out. A successful breach of this level either tomorrow or day after will force bears to start unwinding their position and that may lead to the 5900+ weekly close scenario we are talking about. However an unsuccessful attempt would equally pave the way for bears to take the market down to recent low in coming weeks.
A silver lining for the bulls though is the break-out which already took place in RSI today ( which is supposed to be a leading indicator ) .See the above chart for the RSI breakout that we are talking about.
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