The important support of 5606 was broken decisively with a gap down closing below the other important supports from the 200 and 50 demas.The close was below the 38.2% fibo level of rise from 5196 to 5740. This is very bearish. Besides fibonnaci support levels -50% @ 5470 and 61.8% @ 5405, it isa straight fall to 5196. 5348 has been broken thrice and would be treated as minor support if at all. With this rapid fall the stochastic has reached the oversold level which may give rise to some pullback which would be sold into. The right shoulder of the bearish head and shoulder pattern therefore, is forming well.
Half Hourly Chart
Half hourly charts have been showing bearishness since 8th July when the rising wedge broke down giving a target of 5196. The gap down today gave a supportive indication of the bearishness with an Island reversal pattern mentioned in the Midday Nifty post.( http://vipreetinvestments.blogspot.com/2011/07/midday-nifty_12.html ).
Support taken at 5496 which was a minor support on the way up to 5740.Further supports are at 5470-5405.
The stochastics has shown positive divergence indicating a pullback. Resistances at 5554-5580-5590-5602.
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