Between Heaven and Hell.
Chart under study: NIFTY Monthly Chart.
Latest Chart pattern: Flag
The chart shows a flag pattern, which is nearly matured. Market for the last 10 months, is moving within the boundaries of this flag and is close to either a breakout or a breakdown.
In case, NIFTY breaks out of the 5550 region, you may see NIFTY rallying to dizzy heights.
In case, NIFTY breaks down of the 4850 region, you may witness heavy drops.
Observations: indicators show negative divergence. See line “Y”. For your study sake, I have marked the positive divergence occurred after the 2008 drops and notice how well it worked.
On recent comments that I am being extremely bearish: True that our markets has not confirmed the crack, but the symptoms are not encouraging. The intension is to give many readers a safe exit. If the markets break out of 5550, no one will stop you to buy back your favorite stocks. This is my own view and you may consult your broker for a decision.
As on Close of 18 Jun 2010, all NIFTY signals are bullish and 3 out of four stocks, for which www.ftalarms.com give trade signals have turned short tem bearish.
Fire always catches from below. Latest candlestick patterns of Midcap, Smallcap and Junior indices, all of then show engulfing can be seen on the inset of the main chart. We have to see later this week, if this is a real fire or just a smoke. Take care.
Disclaimer: The views expressed herein are to be used with your own discretion and neither analyst nor the publisher will be responsible for the outcome.
