Thursday, March 28, 2024

Nifty Neo wave with inverse Head & Shoulder pattern at Lifetime Highs!

Nifty is nearing to lifetime high levels and rallied sharply by more than 300 points in single day.

Prices formed inverse Head & Shoulder pattern, broke the neckline and gained momentum.

Below chart shows Neo wave counts possible ongoing pattern.

Nifty hourly chart:

Nifty on 28th March managed to break above the neckline of inverted Head & Shoulder pattern near 22180 and thereby activated the positive reversal on upside for the target of the head which is near 22670 levels.

There was a bear trap by breaking below 21840 temporarily and then reversal back above 22k. Earlier we were expecting the entire rise from the lows of Feb 2024 as a running triangle but reversal above 22180 confirmed that the fall was only a part of Diametric pattern which was wave f and currently wave g is ongoing.

Wave g tends towards equality to that of wave a which also gives the upside target as 22670 levels. However, these are only guidelines and not rules.

Given the sharp rally accompanied by short covering by call sellers the tone for Nifty remains buy on dips.

Over short term for better risk-reward it is prudent to use dips as buying opportunity with 22180 as crucial support and aiming for targets of 22670 levels.

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