Trend:☝(UP) - Reversal below 15000
Nifty @ 15640: Up 290- Bulls Regaining Control
In the last few post, we had been discusing whether the entire correction from 18500 levels (started from Oct last year) is developing as'netural triangle' or 'expanding triangle'. There were contradictory indications in favour of both the patterns however break below 15750 levels last week has now settled the debate conclusively in the favour of 'expanding triangle'. Here E>C>A & D>B meaning all directional legs are bigger than previous one.
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| Nifty Daily |
In expanding triangles its difficult to predict the size of 'E' leg but here in the case the minimum requirements are already met. Another thing to notice in the chart above is the strong postive divergence emerging on the daily chart. Daily RSI has made a sort of double bottom (while Nifty has fallen 500 points lower than previous swing low).
Hence we believe, if Nifty continue to trade strong above 15500-15650 levels then it could push the Nifty back in strong position. Break below 15750 last week could actually prove in favour of bulls as it has helped in clearing weak hands or the short term traders from the market. There were many traders sitting on long position with a SL of 15750 and since it has broken there is hardly any incentive for anyone to hold on to their long positions. Infact now there are voices in the market & from the analysts on the TV, saying next logical level is 13000. We could see some fresh shorting around 15700 levels and if that doesnt materialise into weakness and Nifty manages to make a move towards 16000 then we could further short covering.
In summary, though anything is possible on the markets, the way we read markets, we see a porbability of Markets attempting a pull back from these levels back towards 16000-16100 levels and sustaining above it could push markets all the way towards 17K levels. On the downside we see good amount of support at 15250-15300 levels and fresh short positions are advised only once these levels breaks.
Happy Trading!
