The action I was expecting to occur today could happen tomorrow. It failed to do so to the fullest extend today, but… on its way.
There are two possibilities I see for tomorrow.
1. A soft start above 4200 and take support at 4200. For a day or two, to go range bound in a similar fashion as shown within the circled area, to make it an inverted Head and Shoulders and a strong rally…
2. Open from below 4200 and continue to 4050 and the rally starts from there.
I expect option 2 to happen tomorrow. The reasons are…
· The immediate target of the higher level charts stands at 4050
· The momentum of the fall during the last couple of hours.
· The bottom trend line of the current action matches with 4050
Why I expect a rally after hitting 4050 is…
a) Target of the higher level charts stands at 4050.
b) The pattern formation occurs at critical junctures, which can be either a continuation pattern or a reversal one. Since this pattern of the 60 min chart occurs near to the target level of next higher level chart, I expect a rally after hitting 4050.
On the other hand, a breakout above 4350 will change the whole complexion. I give only 2% chance for that occurrence.
