The main requirement for such an impulse would be :
1. All the three trend i.e. major, intermediate and minor should be placed above the zero line.
2. The three tends should be bullish i.e. rising.
3. The minor trend should be placed above the intermediate trend and the intermediate trend should be placed above the major trend.
4. The trigger line should have crossed zero to generate a buy signal.
In the following daily charts with TTO, the bullish alignment satisfying the above conditions is clearly visible with the resultant quick price movement in Nifty.
The last few weeks, Nifty has been riding on the bullish alignment pattern suggested above. However, the short term trend represented by the twin lines has started developing negative divergence. Though the weekly charts continue to hold price target of 7500-7600 with the inverse H&S formation, in the short term caution would be advised.
With Nifty running up in anticipation of the poll results, profit booking is likely post the event and Nifty may not give much upside from hereon in the short term.With the rapid rise in the short term, the indices could be forming an intermediate top unless the divergence is negated.
While a new bull run is firmly in place and we were able to detect the same as early as in March ( see our earlier posts) it would be prudent to hedge your profits to ride with Nifty for higher levels in future.
