Jun17 update

Nifty moved further up towards 5300 with higher volumes and neutral breadth.Important points for today.

1.Nifty up by 0.8% with 1.1 breadth.
2.17th day of rally since the 4786 lows.
3.7th consecutive up day.(not since March/April 09)
4.Nifty broke the lows of previous day first time in the last 7 days of this rally.

Nifty came within striking distance of 5300 today with just 15 points short.The recent upmove has moderate volumes only and the breadth is going down with every rise indicating weakning momentum with rising price action.Break of previous days low is an important point indicating top or near top of the rally in this leg.
In 17 days,Nifty has retraced about 81% of the fall of 613 points(33 days) which infact indicates stronger momentum on the upside than on downside.
If the momentum on the upside is genuinely strong ie geared towards 5500+ ,I dont expect a closing below 5150 on correction now for Nifty( ie more than about 2.5%).
The Bear case is that this 15 months old rally is exhibiting the last leg of the rally and is forming a double top(with todays closing,Nifty is within 2 % of the top)and thus exhibiting renewed momentum towards the end.Because of the increased momentum on the upside, the ensuing downside should also be fast.
I expect the bear scenario to play out and this rally is just to suck in the buyers and can keep going up to around 5400 before reversing for the big fall.