NIFTY SPOT: Rising Wedge at the Top Hints A Short Term Bearish Reversal

A perfect Wolfe Wave pattern is clearly visible on daily chart of NIFTY Spot. Index has failed to produce stability above prior high 7808 which is also 5^th point of this bearish setup. A bearish divergence is also clearly visible on MACD and supportive for bears. As per this setup, stability below 7800 zones remains bearish for this stock index and it may try to test 7440 as primary support. Further stability below 7400 would extend this corrective move and retest to 7250-7200 can’t be ruled out. Areas of 7721 and then 7800 will remain crucial to watch and sharp recoveries above these levels may deactivate recent bearish triggers.

Recommendation: as per current setup selling NIFTY on jumps around 7650-7700 with stop loss above 7810 for targeting 7440-7300 might be appropriate in next 9-27 days.

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