#MarketUpdate - Now - Bulls at a pit stop / Finish Line ! ! !

Hi All,

As mentioned earlier, in Nifty Harami post couple of weeks back, the bullish pattern worked for Nifty and after surpassing crucial levels of 10580-600, Nifty rallied smartly and currently trading near another selling pit stop of 10800. Bulls, who have bought near 10600 are advised to book profits of more than 2% or trail stop loss.

The cautious bias is on account of confluence of confusing factors which leads to a indecisive bias for the benchmark index going forward...

Bullish reasons -

• Simple higher top higher bottom formation after breaching 10770 levels
• A strong gap up opening today, meaning supports for intraday and near term would be near 10680-50
• A kind of symmetrical triangle breakout, which is a continuation pattern
• In spite of bearish patterns, weekly chart shows 2 strong bullish pressure candles

Bearish reasons - 

• A bearish engulf on daily charts (1st and 4th June candles), though the high is surpassed, prices have not been closed above 10770.30, so, if prices close below 10770 levels in spite of such a strong opening, it can then mean a first knock of bears
• A weekly Bearish Engulf formation with final resistance near 10930 and close above that will negate the pattern and its bearish consequences.

I personally feel (for a short term view)

1. For bulls, any sizable upside can be expected only above 10930-950 levels.  

2. For bears to take control, firstly a close below 10770 will be a welcome move followed by break of 10680 levels to close the bullish gap and finally a convincing breach of 10550-540 levels to give a lower bottom formation.

My personal bias still remains bullish (thanks to higher top higher bottom) but fresh additions to be only done above the key resistances of 10800-10930. hence those who bought Nifty based on Harami pattern, can stay long after booking small profits and trailing stop loss to cost

Cheers - 

Chart for illustrations -