As expected, price did enter the blue channel zone only to revert back below it. The reversion though was not immediate. It was slow, gradual and painful for all trapped bears. I believe there are still a lot of bears who wish to exit their positions and that is why it may take a bit longer for price to come down to 21 EMA
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)
The typical setup of reversal is double top at price such that second top is higher than first top, while momentum indicator’s second top is lower than previous top. This has not happened so far. But this is not mandatory either. The price as well as momentum may simply slide their way lower. Let’s see which scenario happens now.
Scenarios for the week ahead (highlighted as yellow box with black lines dissecting scenarios)…
|Scenario||Anticipated Price Action|
|Consolidation||Between 17500 and 17250|
|Downtrend||If breach below 17250; to drop somewhere till 17100|
|Uptrend||If breach above 17500; to rise somewhere till 17700|
Dow has been falling consistently, perhaps due to Apple. On the other hand, our market has Reliance pushing it up.
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