Market Next Week

I was expecting NIFTY To hit 4050 and then rally back. However the assessment failed to achieve the expectation but, dropped only to 4146 just short of 96 points and now rallying back.

 

How far this rally could take NIFTY up? What will happen after this rally? We will try to analyze it. I am not planning an assessment keeping in mind of the Budget as there are one million people to come out with ten million opinions. Hence I will stick to the technical analysis.

 

There are two options.

1.    NIFTY rallies to 4550-60 and turn back, forming a Head and Shoulders pattern (H&S).

2.    The strongest rally can only take it to 4825 and turn back forming a Right-angled and ascending broadening formation.

 

If both options, after the rally, cuts the bottom trend line "BT"; you will witness a massive fall.

 

I took technical measurements of the swing "AB" and "BC" and found that "BC" had higher strength than "AB". This, if we extrapolate, it will result in a technically weaker move than "AB and "BC". Such a weak move should terminate at around 4560. Hence I expect option "!" to happen.

Option "1" if happen, will have a downward targets of 3450, 3120 and finally 2700.

Option "2" if happens, and a break down below "BT" occurs there after, you might see NIFTY touching the Oct Low.

Anyways, these are possibilities only and we will re-analyze it once again after the pattern formation is complete.

 

Conclusion: This week, NIFTY is likely to rally to around 4550 and stays range bound in that region.