Daily Chart II
The Nifty reacted to political news and rallied on Friday but reacted after briefly crossing the earlier highs of 5593.The pattern formed is an outside pattern.This is within a bear flag and which could also be the right shoulder of the bearish head and shoulder pattern.The necklines are at 5474 and below that the larger head and shoulder neckline is at 5362.The only point which goes to the bulls here is the necklines are upward sloping. Downward sloping necklines are more bearish as the show lower lows.
Crossing the resistance line of the bear flag at 5610 will find resistance at 38.2% fibo level-5622,
200dema-5624 , and the 50 dema -5655.
Half Hourly Chart
Half hourly charts depict the same bear flag and bearish head and shoulder patterns discussed on daily and weekly charts ( you may read the weekly post here http://vipreetinvestments.blogspot.com/2011/05/reigning-nifty-weekly-update-14th-may.html ).
The pullback action from lows of 5443 adhere to all bear flag requirements :
- appearance after a downtrend
- retracement of the downtrend during the formation of the bear flag is very "slight"
- the pullback does not make new lows and is usually well channeled thus appearing like an upward moving channel or a parallel
The break in all possibility therefore, should be down with a move of 450 points from the point of break down.
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