Last week I wrote, "We are once again in the perplexed state whether markets will move up or down. This is the reason we follow price with stop losses instead of making these difficult predictions about the future. Remain long with a stop loss of 4200 for targets of
- 4402 61.8% retracement of fall till 3918
- 4480 previous top
- 4590 falling wedge target --shown on half hourly chart
- 4693 top of rise from 2539
- 4812 channel target shown on daily charts."
- Weekly oscillators are showing strength having started moving up again after a very shallow dip.
- Daily oscillators too exuding strength -- RSI14 and Macd have moved up after taking support at levels above oversold territory which is a sign of strength.
- Intraday oscillators are moving up but shown negative divergence.
Moving Averages are bullishly aligned on all time frames.
Bearish Price Pattern
- The Nifty has moved decisively above the neckline of the bearish Head and Shoulder pattern indicating a flase breakout below neckline. Moving above 4693 which is the head, will nullify the bearishness of this pattern.
- Breakout from a bullish falling wedge formed on weekly charts giving a technical target of around 5100.
- Downward sloping channel breakout on daily charts with a target of 5170.
- The latest pattern to emerge is a potential bullish Inverse Head & Shoulders pattern and the Nifty is on the verge of a breakout . The upward sloping neckline makes it all the more bullish. Breakout will give a 600 point move.
- Advance Decline line has started moving up supporting an upmove.
- Follow up buying during the week was on marginally higher volume.
- A high put call ratio of 1.30 indicating downsides are limited.
Strong support at 4300. One can look for oppurtunities to go long with a stop loss of 4300.
Happy Trading !!