Nifty channel chart

Sep21-W1: Nifty to bounce between parallel channel this week (Aug30 to Sep3)?

Though the market though began with a gap-down last Monday, it remained in a rising mode throughout the week. The market tested the red rectangle and is now hovering around it. The hovering has been happening for last 3 days now and this consolidation is what I was anticipating last week.

Now the following is my analysis for coming week based on what I am looking at (You may want to open image in new tab or save it for better view)

Even though the price action is shouting for a breakout above red rectangle, RSI is giving a different story. It almost looks like a head and shoulder formation in the making on RSI along with possible divergence. Furthermore, the Bollinger bands have expanded too much and are set for compression. Thus, I remain neutral on market for now due to conflict between price chart and momentum chart. The market might just consolidate in the parallel channel.

Scenarios for the week ahead (highlighted as yellow box with black lines dissecting scenarios)…

ScenarioProbabilityAnticipated Price Action
ConsolidationMedBetween 16900 and 16500
DowntrendMedIf breach below 16500; to drop somewhere till 16275
UptrendMedIf breach above 16900; to rise somewhere till 17050

Just like ‘winter is coming’ in Game of Thrones, the world is chanting ‘taper is coming’. When it comes, the flight of money from stock market to safe havens like USD and gold is imminent.

DISCLAIMER: I am not a SEBI registered adviser. All the information provided on this website is for educational / informational purposes only and should not be taken as investment advice.