What now?

Half hourly chart

The nifty opened down 80 points leaving positional longs breathless. We should consider this as a gap opening at 2677-83 though NSE shows the opening to be almost same as yesterdays close. The gap could not be closed throughout the day's trade. There were not many oppurtunities intra day as the movement was between 2706 and 2690 -- just 16 points !! -- for most part of the 5 1/2 hours, thoroughly frustrating traders . The support of 2677 -- the bottom made last week held till the last 15 minutes of trade giving hopes to the bulls of a last minute pullback. It was only in the last 15 minutes that the support gave way stopping at 2659, almost at next support of 2661. Tomorrow this support too should give way as the trading today suggested bears were more powerful.

Now for the technicals--
If the support of 2661 holds we may see a pullback to 2730 levels which is the 50% retracement level of fall frm 2798 as well as earlier support level which held for all of last week.I dont ezpect more as conditions are really bearish

The half hourly chart shows another head and shoulders bearish pattern forming, with a downward sloping neckline. This will come into play if the neckline at 2645-2649 breaks giving us a downward target of (2970-2705=265 points) from the neckline which should be around 2650-265=2385.

The larger pattern -- symmetrical triangle forming since October 2008 lows has been broken giving a downward move of about 750 points to a possible low of 1995 to 2000.

So one can be safely short with a stop loss at 2800 -2806 which is the last minor peak made on 18th feb,2009 and is the high of the right shoulder .

Happy trading !!

Lakshmi
www.vipreetsafetrading.com