Giving up all the gains following the weak global scenario, Nifty is testing important supports. Yes IMPORTANT supports! The daily chart below shows Nifty is just a wee above important support of 4250. Actually anything above 4225 is hope for the bulls and below that is nirvana for the bears. Nifty has closed in the vicinity of the 50 period MA and at the long term down trend line it had conquered earlier. I have superimposed on the chart for simplicity, what exactly the shaded pattern looks in isolation sans all that clutter of trend lines. YES it is indeed an H&S formation, but it only gets confirmed when we break the neckline decisively and trade below 4200! One important point to be noted here is that though we can see the H&S formation in the making, it is never prudent to preempt any formation till they are complete. In short always wait for confirmation from the price action. A mistake many of us novices make is to get excited and pull the trigger too soon. The Daily now has clear resistance back at 4370 and 4450 and immediate support in the 4225/50.
The hourly chart has broken the previous pivot low and made a new one. The MA sequence is nicely lining up at the all important 4370 where the 200 period (red Line) is waiting for the 20 (green) & 50 (blue) to join the party. A quick pull back to the MA’s is not ruled out, though hourly suggests going onwards till 4100. Overall Nifty is now very weak and needs some very strong domestic triggers to pull her up.
No comments:
Post a Comment