Monday, June 17, 2019

Did Nifty form topping Head & Shoulder pattern? What are the targets?

Did Nifty form topping Head & Shoulder pattern? What are the targets?

Nifty has decisively broken below the level of 11770 as of now and trading much below that. Today’s closing is going to be important as we can see break below the important topping Head & Shoulder pattern

We believe in combining orthodox technical analysis method along with Elliott wave patterns and combined whatever is working in the market for high conviction trade setup.

Nifty is exhibiting fractal nature with forming Head & Shoulder pattern similar to that seen during the previous tops as well.

Below is the chart, picked up from daily research report “The Financial Wavesshort term update”
Nifty 60 mins chart: (published in morning on 17th June 2019 before markets opened)

Wave analysis:

Following was published in morning before equity markets opened

In Friday’s session Nifty witnessed a flat opening after which it moved lower for the first hour and later moved sideways for the remaining part of the session. It was only during the last half an hour where prices witnessed a sudden fall of nearly 76 points and closed near the days’ low. The past few sessions have been witnessing continuous deterioration in the market breadth and similarly on Friday the breadth weakened further with only 797 advances as against 1725 declines. Banknifty which has been a leader during the beginning of the fall broke its important support as well closed below the same in the last session. It looks like the banking index has once again taken the lead and might be indicating towards the coming of the catastrophic fall.

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The daily chart shows that, (shown in actual equity research report)

As shown on hourly chart, the move looks very similar to that seen April. The entire distribution looks like a topping Head and Shoulder pattern which was also the case in April 2019. Now the neckline is placed near 11770 and the short term trendline support is already broken. Above that Bank Nifty has broken the entire range on downside and closed below it. Today’s movement is going to be crucial. If we are reading the pattern correctly then break below the Head & Shoulder pattern will give the target of ……… on downside which is also near the Gap area and the blue channel support. It is time to be cautious because selling is seen across the space with companies defaulting. The entire pressure is yet to be seen on the PSU banking space which has been the major financers to the debt ridden companies. This is also the reason why RBI has been consecutively reducing the interest rates which is not hinting towards positive sign. Stock market has sustained at elevated levels with PE ratio near 30 again from long term perspective this is a dangerous sign.

Case in point: if we break below 11770 and broader selloff intensifies it can result into serious capitulation that majority are still ignoring….

In short, …close below 11770 will result into first target level of ……… or probably lower. Any move back above 11900 will indicate a false break on downside and can lead to sudden positive reversal. So trade cautiously based on levels mentioned.

Nifty has so far continued to trade exactly as per the pattern under consideration and mentioned in the daily equity research report. We cannot be more accurate in identifying patterns and combining them along with Elliott wave. You can get access to the daily and monthly research reports and see yourself where are we headed and how far will the stocks collapse. There are amazing opportunities on daily basis and you can also get access to Intraday advisory on Nifty and stocks and receive equity research free along with it. Get access here

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