The rising wedge pointed out last week broke down as expected creating a bearish engulfing pattern encompassing last 2 weeks laboured gains.For the first time Nifty has a weekly close below the uptrendline from March 2009 lows.Volumes were a little more than average and breadth very poor.This indicates more fall to come.
Have drawn a triangle joining 5721 and 5883 which has support at 5900. If 5900 holds then Nifty could rally to the triangles downward sloping trendline joining 6338 and 6181 at 6162. If this support fails then could fall to 5721-5690-5670.Oscillators are holding above lows corresponding to Nifty's 5690 low which gives hope of holding the support.
The daily charts show support taken on uptrendline from May lows of 4786.The first leg of the fall from 6338 retraced just around the 61.8% fibo level of it's rise from 5350. The fall from 6181 has retraced just around 61.8% fibo level of rise from 5690.This level is at 5890 which could hold in keeping with the pattern of the earlier fall. If fails then has good supports at 5857-5845-5785-5730.A break below low of 5690 could see the Nifty tumbling to 5385-5350-5300.
OBV is holding it's low corresponding to Nifty's 5721 and 5690.Will be keenly watching, for further insight, whether these levels hold or gives way .
Half Hourly Chart
A symmetrical triangle forming ? If respects support at 5845-5850 on line charts then the fourth leg up could start.Corresponding support levels on candle charts are at 5784-5787.
Weekly charts will turn bearish if the low of 5690 is taken out on a closing basis.Till then look for signs of the uptrend resuming.
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