Nifty spot is currently trading at 8565.55. This index has recently placed a top at 8968.70 which was 93.4% correction of entire bearish attempt from high 9119.20 to low 6825.80. Nifty has turned sideways near 88% Fibonacci correction of bearish move that presents ideal condition for a Bullish Bat harmonic pattern. Nifty price movement has already completed 3 legs of this pattern and now final leg ‘CD’ is in progress that completes near 88% correction of primary leg ‘XA’ which is placed at 5574.
Based on price action Nifty, however, had recovered from 57% correction of bullish attempt from low of 5118.85 to high 9119.20 but failed to make a higher top to confirm continuation in longer term bullish trend and now it keeps chances alive for negatively biased sideways market. Nifty has been fluctuating between 8500-8900 zones from past few weeks and attracting buyers near the areas of 8500-8470 zones. Thus we can consider areas of 8470 as very strong support but a bearish cross on MACD indicator, however, in bullish territory warns of weakening bullish momentum. Failure of 8470 could result in a retest to 8000 zone and further stability below this level will bring 7500-6900 on cards. Failure of 6800 will add more confirmation in completion of above discussed harmonic structure. Resistance can be expected near the areas of 8810 and then 9000 zones. Stability below these levels will keep chances alive for completion of our discussed harmonic structure whereas penetration of these levels to the upside will invalidate all our bearish expectations.
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