Nifty has formed several interesting patterns that have upside and downside implications. Some of these have been discussed in earlier posts, but are being repeated here.
1) The 5 months long sideways consolidation within a ‘rectangle’ pattern followed by an upward break out – validated by a volume surge. Rectangles have measurement implications that gave an upside target of 6750. This target has been met already.
2) Immediately after the break out from the ‘rectangle’, the index entered another short sideways consolidation within a ‘flag’ pattern that also has measuring implications. The upward target from the ‘flag’ break out – validated by an uptick in volumes – was 7170.
By touching an intra-day high of 7172 on Tue. May 13 ‘14, Nifty has almost met the target. Why almost?
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