FOLLOW UP 3 - Will it repeat the show once again ?

Yesterday NIFTY convincingly closed above 5430 and given break out from the range 5320 - 5430, in which it traded for 7 trading sessions. This is third daily close above 5400 level in last 5 trading sessions. So now nifty looks quite bullish. So what are the possible targets ?

As mentioned in previous posts 5700-5800 and then 5900-6000 are the possible targets. But one more interesting pattern has developed on daily chart which gives probable target of 6250. Lets see how?

ROUNDING BOTTOM PATTERN:-

As shown in above chart  daily chart of nifty has formed ROUNDING BOTTOM PATTERN which is bullish pattern. Target for this pattern is 5400 + 800 ( i.e. 5400 - 4600 ) = 6200. Is this possible who knows but as of now technicals suggest that nifty may fly to 6150-6200 in next 2-3 months.
CAUTION :-  Even though nifty given daily close above 5400, it not yet given weekly close above 5400, once it gives weekly close above 5400 the possibility of above targets increases.


If anyone is interested in reading more about rounding bottom pattern here is a link http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns:rounding_bottom_reve  

CAUTION:- The above chart is weekly chart of nifty and since JAN 2008 quite a few time nifty has taken support or faced resistance at band shown in blue lines. To be precise it has taken support 3 times, while faced resistance 5 times . In short nifty is trading at very crucial levels from long term perspective so as of now any view should be taken with proper stop loss.

As of now stop loss for any long term investor is weekly close below 4530.
And stop loss for short term trader is daily close below 5320.


 DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.