Nifty Index 50 did slip below my green trendline only to claw back. Despite the gap openings, Nifty continued to remain within a defined range. It couldn’t break the red box but it did not go down either and thereby, vindicating my last week’s theory of consolidation.
Now, here’s what I am looking at:
Despite the negative divergence and hit from red box, Nifty continues to hold itself quite well. It is resilient to any downward movement. Moreover, banknifty has joined the party with fireworks. Thus, my bias is on upside with a big movement coming up. But I have this big red box on top which is Fibonacci extension of Nifty’s upward trend since last year. Fibonacci is always subjective but I believe 16200 should give resistance for now.
Thus, scenarios for the week ahead (highlighted as yellow box with black lines dissecting scenarios)…
|Scenario||Probability||Anticipated Price Action|
|Consolidation||Medium||Between 15925 and 15650|
|Downtrend||Low||If breach below 15650; to drop somewhere till 15450|
|Uptrend||High||If breach above 15925; to rise somewhere till 16200|
If this upward move happens, it might be nothing but part of the failed breakout which I have been anticipating for quite some time now. Basically, Nifty might breakout above the wedge (drawn as combination of red and green trendlines) only to fail. Let’s see.
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