Quo Vadis? Nifty! - Manoj Bhagra

We have a holiday today, so I guess lucky to have avoided another fall considering the weak global markets around us. Today also saw the release of Inflation Figures which surprisingly have reverted to single digits. A cause of celebration? Why not? A small rally? Sure! Isn’t it how we reacted to IIP numbers yesterday before plummeting.

The range mentioned on my last weekend post 2850 to 3250 for a breakout on either side held well. Now the bias shifts to 2750/2700 - last hope for bulls - because any break below 2700 is surely going to be testing time for the bulls.

A quick glance at the daily chart of Nifty shows we had reacted to our long term trend line and snapped back. It has also become too much of a work for the bulls to even stay and close above the 20 period-MA (drawn in green). We have closed again at the 38.2 percent retracement, much will depend on who takes control from here.

The hopeful bulls are looking to a pullback from here, and draw, what looks like an inverted complex H&S pattern with a breakout above 3160 (drawn on closing basis on the chart); can’t really blame them, as I have been often saying, "Hope lays eternal in a bull’s heart!"

The overhead resistances, which I find are much harder to overcome now, are at 2950/3050. Whereas the supports which are so easily taken out are at 2750/2650. So we can say that our range has shifted with a negative bias for now.