Week Started with a strong Bear attack, Nifty open at 9960 and fell to the low of 9816 levels and close the day at 9872.60 levels which are a fall of almost -0.92%. Bulls try to push nifty above 9900 levels but fail to do so.
Nifty has already retraced 61.8% of its previous up move, from the low of 9685 levels to the high of 10179 levels, which act as a good support. Below is the Chart which shows the Fibonacci levels. Nifty Next support levels are at around 9790-9750-9700.
Price Pattern clearly showing “M” Top Pattern.Price has broken the earlier trendline support of 9950 levels. Next Trendline support is also at around 9780 – 9700 levels.
Weekly Chart is also attached below for your reference.
Tomorrow might be another Bear day as major global indices are trading in the red. Don’t jump into trade at opening let markets to settle for 1st 10-15 mins.
Double Top / M Top
The double-top pattern is found at the peaks of an upward trend and is a clear signal that the preceding upward trend is weakening and that buyers are losing interest. Upon completion of this pattern, the trend is considered to be reversed and the security is expected to move lower.
The first stage of this pattern is the creation of a new high during the upward trend, which, after peaking, faces resistance and sells off to a level of support. The next stage of this pattern will see the price start to move back towards the level of resistance found in the previous run-up, which again sells off back to the support level. The pattern is completed when the security falls below (or breaks down) the support level that had backstopped each move the security made, thus marking the beginnings of a downward trend.
Today was an excellent day for “Bears”. No chance given to bulls to fight back !!
As anticipated, Nifty fallen from the high of 10124 levels after giving gap down opening and took support at 9950 levels which was a fall of almost 157 points, Changing short term trend to negative.
let’s see after today’s closing, How charts looks like..
Oops Candlestick Pattern not giving good signals for bulls as of now. Bearish Engulfing Candle at the top with RSI Negative Diversion. To see the next support levels let move towards the Daily Charts.
On Daily Chart, Fibonacci support levels are at 9930-9874-9790.
Price took support at the trendline around 9950 levels. On Hourly time frame, It’s clearly visible that trend has completely changed from up to down, as last low was broken. So now its a sell on rise market.
We have booked 1 lot and holding another lot for monday with SL trail to 10010 levels.
Learning Here – RSI Negative Diversion / Candlestick Pattern (Bearish Engulfing)/ Dow Theory
As expected Nifty moved up really well from low of 9685 levels to make a new high of 10180 levels.
So now at this stage, confusion is building up to go long or short.
Let’s study the charts below and analyse what’s coming next.
1st weekly chart is below for your reference
The weekly chart has a negative diversion on MACD in the form of peak and trough but RSI 14 yet to confirm the negative diversion. Candle formation is clearly showing indecision between bulls and bears. So tomorrow will be an important day for nifty. It will give us a bit of indication where it will be heading next.
Now come to Daily Chart…
On Daily Chart, Nifty has confirmed the negative diversion on MACD and RSI. So if prices go below today’s low, the Bears will have a strong hand and nifty can retest levels of 9980-9960 levels.
Now Let’s see Hourly Chart…
Bears in full control on the 1st hour of markets where Nifty retested the support levels of 10050, Nifty has made a hidden positive divergence and bulls tried to take nifty back above 10100 levels and retested the resistance zone of 10170-10130. Below 10040 short-term trend will be bearish and nifty can retest lower levels.
At this stage, one should wait and watch for possible direction.
Possible Trade will be,
Sell Below 10040 for Targets 9975-9950 levels.
Learning Here – Candlestick pattern, Negative Diversion, Double Top pattern.