The breakout above downtrendline from 5629 proved false. Nifty made a lower high lower low candle and has broken below the uptrendline from December once again.Oscillators showing weakness which may lead to a further fall.
The right shoulder of an Inverse head and shoulder bullish pattern could still be forming.
An outside day pattern was formed which indicates indecision.The candle formed was a doji which shows indecision too.So a reversal of the downtrend may be in store.The trend following Demas are all in sell and bearishly aligned.The break down from the uptrendline is intact for the fifth consecutive day. The close is also below the 200 dema for the third consecutive day.The triangle breakout shown in the half hourly chart below is intact with a target of 4974.
Half Hourly Chart
Weekly Volume Chart
After pulling out the volume chart I am more than convinced that the fall from 5629 is a pennant forming.It has adhered to all the features. Breakout from the November 2011 down trendline, increased volumes on the sharp rise from 4531, falling volumes and converging trendlines on the fall from 5629 and the time taken till now is 9 weeks.The validity of the pattern remains till 12 weeks by which the pattern should break out.So the bulls have 3 more weeks to prove their might.Else the bears will take the Nifty to lower levels.
Resistance at 5225-5250-5270 Support at 5136-5080-4950
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