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.
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.
View my
latest webinar on Nifty: Is it headed for a crash!
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
Upcoming Seminar: I will be discussing all of the above
methods on how to identify patterns and combine them with important indicators
and Elliott wave, Neo wave theory,
Hurst’s Time cycles in a comprehensive training module – Become market
wizard (BMW) – build from basic to the most advanced level of becoming a
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