NIFTY: Technical Outlook

NIFTY index has been witnessing a correction in a channelized manner after posting a life time high of 9119.20 during the month of March this year. Now index is moving in a corrective leg of this intermediate down trend. Recently nifty has headed a high of 8246.40 but failed to attract follow up buying after closing a full gap partially which was left during the month of August this year. On Monday, if this index manages to hold above 8250-8260 zones then it will try to head towards 8320-8360 to fill this gap completely. There is another small gap left between 8322 and 8360 zones and these areas are also resisted by 50% correction level of entire bearish move from high of 9119.20 to low of 7539.50. Presence of descending trend line near 8350-8360 zones will be a tough challenge for bulls. Price and time symmetry also hints a potential reversal from 8300-8350 zones.

In other words, stability below 8260 will keep this index in a consolidation mode between 8100-8260. Recovery above 8260 will help this index to retest 8320-8350 zones but reversal is likely from 8350-8360 zones.

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