Nifty Tomorrow: Prediction, outlook and Nifty Trend for 21st Feb 2022

 Medium Term Trend:👇(Down) - Reversal level @ 17650

Nifty @ 17275 down 28 points- Fails to move above 17500

In our last post we had mentioned-

"Breaking of contracting triangle is a very bearish sign for markets. It confirms that initial fall from 18500 to 16450  was a trending move and the recovery we have seen after that (in the form of ABCDE triangle) was just a corrective move. This has opened up bearish targets for as low as 15500"

Now in last 4 days, markets did not exactly move in line with our expectations, and buoyed by news of Russians pulling from Ukraine, bulls pulled the markets back above 17300 levels on Tuesday itself thus negating the impact 'bearish contracting triangle'. Contracting triangles are a very reliable technical patterns and they work more often than not however this time it was not to be.

Having said this, inspite of a 500+ points pull back on Tuesday, Nifty failed to add more strength and closed just below Tuesday high which is keeping the bearish options (and lower targets) open still. Nifty may have been able to negate the contracting triangle, but there is another bearish pattern emerging on a slightly larger scale ( H&S pattern with a neckline at 16850-900) levels.

Nifty daily

In the chart above it can be seen that Nifty has been making H&S pattern form Dec last year, neckline of same is sitting around 16850 levels. a break below neckline can open downside targets anywhere from16k to 15K levels. hence caution is still advised. Usually from our experience, we have seen that any pull back (or pull down) which is based on news flow usually does not sustain and reverses back in coming trading session and if Tuesday's pull back of 500 points was all based on Russia-Ukraine news-flow then there is a high probability that markets will reverse from here. 

To keep bullish options make, Nifty must make a strong push above 17650 levels ( which was previous swing high). On daily charts and hourly charts Nifty is consistently making lower highs which is not instilling much confidence in the bulls camp for now.

Happy Trading!