May21-W1: Nifty correction due to failed triangle breakout (May3 to 7)?

I have to admit that I got it wrong last week. Since Nifty was always somehow taking support from 14200 (happened 3 times), I should have written that probability of bounce was higher. Even RSI with its divergence was hinting this. Even then, I would never have expected range of bounce to break triangle by such a huge margin. At the end of week, Friday played spoilsport bringing Nifty back inside triangle.   

Now, here’s what I am looking at:

My bias is on downside as I believe that this is a pattern failure. I expect coming week’s price action in the yellow highlighted box

Thus, scenarios for the week ahead…

ScenarioProbabilityAnticipated Price Action
ConsolidationHighBetween 14250 and 14850ish
DowntrendHighIf breach below 14250ish; to drop till 13850ish
UptrendLowIf breach above 14850ish; to rise till 15050ish

Even Nithin Kamath was amazed by the rally witnessed last week. The disconnect between reality and market continues but I guess this market is a function of liquidity and not of fundamental factors. In any case, I am neither a fundamental analyst nor an expert at expert analysis. And then there is this disclaimer anyway 🙂

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.

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