We once again have a head and shoulder pattern forming and have to see whether the neckline gives or the head is blown off once again to make higher highs.The neckline offers support at 4927. Incidentally , the 20 dema is also at 4927 thus making it a very important support. Break of the neckline at 4927, could have a down move of 200 points from the neckline which calculates to 4727. The neckline of the bullish inverse head and shoulders shown in red is at 4702.
Daily Chart showing failed Head and Shoulders Patterns
The daily oscillators are moving down from overbought region and have made a lower low indicating that Nifty too may break the low of 4904. Nifty has moved below the 5 and 10 demas but all the moving averages are still bullishly aligned.
Half Hourly Chart
The half hourly moving averages are all bearishly aligned except the 200 period ema. The 200 period ema is at 4938 . Lets see if it offers support once more to the Nifty. The close held above the 61.8% retracement of rise from 4921. This may see some effort to make a recovery.The green downtrendline offers resistance at 5065-5055 for the day.A breakout and close above it will lead to highs and be in line with what the Nifty has been doing since May 2009.
Strategy remains the same : Be neutral till clarity of direction emerges.
Happy Trading !!