Last week, I had expected market to start the decline but once again sustained it momentum. This time I am using the Daily line chart (since the compressed chart is more appealing to the eye) to assess the situation. Look how critical the current level is…The level NIFTY closed on 4th Jun is an extremely important level. NIFTY historically had the strongest resistance at this point since Feb 2007. Look at positions 1, 3 and 4 which posed a very strong resistance at this level and position 2 a strong support. It is not easy to cross this level and move ahead. From all the three positions, that are at 1, 3, and 4, NIFTY had dropped to at least 4100 before further move. Hence, this time too, it is expected that NIFTY drops to at least 4100 before the next move is decided.
Interestingly, all these drops took nearly 20 trading sessions shuttle between lines "R" and "S'. All these are indications that NIFTY is heading towards bearish "weeks". Even though, it did not occur last week, as expected, this week, such a move is well on the cards. Now the question is if NIFTY will take support at 4100 or not…We will analyze it in the coming weeks.
