Hi All,
Sorry for updating the blog after a while, couldn't do so as was caught up, however those are connected with me on What's App could have gotten the occasional trades / updates.
Now, further to the view published on 15th May,
Advantage Bulls...? After breaking below 9040-900, Nifty did fell towards 8800 and yet again took support, suggesting a kind of sideways move. However after surpassing 9500-9700 and especially 9889, the high of the first bearish island pattern of 30th April, it gave a higher top higher top formation on the daily charts, suggesting a bullish trend.
Further to our earlier predictions, Nifty after sustaining above the 9900-10000 mark, a 50% retracement of the entire fall from 12400-7500, the next target ideally should be near 10440-10550, which is the 61.8% retracement of the fall and a kind of last resort for bears.
However, as per today's close, Nifty, near a crucial gap resistance which was formed between 11th and 12th March, has formed a
Bearish Belt Hold Pattern (click to read more), which suggests there might be downward reaction after such a strong upmove of last couple of weeks.
So, as today's high near 10328, being in the gap down resistance range of 10040-10324, the levels of 10330-10350 will act as a strong resistance and would be a hurdle for any up move further.
However it is important to note that, thanks to the Higher Top, Higher Bottom on daily and weekly charts, the medium term trend looks positive, the mid term reversal can be 9944-40, hence any down fall can be a counter reaction to the extended up move and hence can be for a very near term of less than a week or so....
Moreover, Nifty has formed a kind of triangular consolidation after a strong up move, which can be termed as a continuation bullish pattern similar to a pennant, and a close above 10180 can mean a strong up trend to continue for the index and could even target more than 11.3k (also near the 78.6% retracement of the entire fall, which is the next level to be watched for after 61.8%), however for that it would be advisable to have sitained close above 11550-600 levels which are the retracments.
In a nutshell, though there are enough positive triggers for bulls and even the momentum being with them, as Nifty is trading near a crucial gap resistance of 10040-10334, and near crucial retracement levels (10438-10552) from the entire fall from 12430, I am a bit bearish for near term, with a reversal above the resistances mentioned.
But, all said and done, a bearish view, like all other candle chart patterns, is only confirmed when prices sustain below the pattern's low, i.e.
today's low near 10120. Below this, initially nifty can target 10040-10000-9940, where 9940 remains the crucial bottom to decide the further course of price action.
So, bulls are advised to be a bit cautious, whereas price formation offers a great low risk opportunity for bears below 10120, with targets near 10040-9940. In order to have a proper risk reward a sell on rise would be advisable with stops above 10350...
Cheers
Hrishi...
