Bullish divergence spotted after massive volatile day
- Arup Nag
- Nov 10, 2016
- 1 min read
10th November 2016
Yesterday was very important for the NIFTY due to two very important news events. The Indian government banned all big currency notes to curb the blak money out of the economy and the results started coming from the US presidential election. The day saw huge volatile movements right from the opening bell. The NIFTY opened at 8067, immediately went down to as low as 8002, got settled around 8200-250 when the confirmation of Donald Trump winning started coming and then finally climed sharply to 8450 region during the first speech from Trump was shown live on TV. The calculated SMT for tha day is shown below in the chart.
From the above graph I could spot a regular bullish divergence between the closing prices of 2nd and 9th November (yesterday). Yesterday's closing was 72 points lower than that of 2nd. On 2nd November, SMT made a lower trough so that's our reference point for spotting divergences. As pointed by lines we can see the SMT yesterday was at much higher value.
This bullish divergence indicates a positive upwards start in the NIFTY on 10th November (Today). Let us wait and see how the market behaves today.
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