Daily Line Chart
As mentioned in my post for 26th July, the bearishness of the shooting star was confirmed today by a bearish candle.Breadth was negative and volumes average. Volumes on declining stocks were higher than on advancing stocks.The uptrendline once again lent good support. This is the fifth strike on the trendline . Coupled with this is the narrowing of trading range as depicted by the rising wedge. Negative divergences on oscillators too have been cautioning bulls since some time.On line charts the trendline is already broken increasing the possibility of lower levels for the Nifty.
The Nifty needs to trade above 5427 to remain above this trendline and close above 5437. Break of this trendline could be extremely bearish giving a 690 point move on the downside.A break below 5350, which is the swing low, would be further confirmation of a breakdown in the Nifty . A reversal of this view would require a breakout above the high of 5477.
Strong supports are at 5400-5350-5315 and Resistance at 5450-5477-5518.
Happy Trading !!