Two crucial levels 7725 and 7925 hold the fate of Nifty an the near future. Nifty has corrected 78.6 % to 7709 from its move from 7540 to 8328 and is presently holding the recent lows.
7925, which is the extended neckline of the previously failed inverse H&S pattern, forms stiff resistance to any up move. Any sustained breakout above this level could take Nifty to its logical target of 9200.
A break below 7725, a neckline for the impending H&S pattern could result in levels of 7100 if Nifty is unable to hold 7500.
Even though, TTO is indicating mild bullish bias in the short term, the strength needs to translate into daily and weekly oscillators which at present are placed below zero.
It would be a difficult time to take a position in this market as it may surprise on either side.
