As shown in above chart nifty formed INVERTED HEAD AND SHOULDER PATTERN in hourly chart with neck line at 5050 and broken above this neck line yesterday. The target will be equal to height of head i.e. 5050-4750=300 points above neckline, therefore it should target 5050+300 =5350.
In above chart it looks like it had formed CUP AND HANDLE PATTERN from which it is broken out, overall it looks like it will target 5350.
To reach this target of 5350 it should negotiate 2 main hurdles (resistances) on daily chart as shown in third chart. If u observe carefully, u can note that today it get resisted at resistance 1. If tomorrow (FRIDAY - SO WEEKLY CLOSE) it closes above resistance2 approximately above 5180 possibility of it reaching 5350 increases. Right now it is trading above 20sma & 50sma on daily charts, till it closes above 20 & 50sma it will favor uptrend.
But at the same time it is near the upper border of trading range of 4700-5200, so take care it may go down also. These are testing times of trader's patience. If u have good trading system follow it u will be on right side. REMEMBER LONG TERM TREND IS STILL DOWN.
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2 comments:
my opinion is that nifty should close above 5200( & sustain there, major resistence ) to go beyond that
Ya that is the main hurdle, if it closes above 5200, chances of breakdown from descending triangle on weekly chart, which happened on 12/8/11 and i mentioned in this post http://kolhapuritrader.blogspot.com/2011/08/follow-up-nifty-in-triangle-and.html, on 18/8/11 may turn failed descending triangle pattern chances of which are 20-25%
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