POST UPDATE : May 27, 2016
Within a week of our following post, Nifty has exploded into bullish territory with tremendous momentum rising from 7889 to 8120 as seen in the chart below and in the process crossed 7995 which was a major resistance. Nifty is now all set to target 8335 in the immediate short term.
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| Nifty Weekly |
ORIGINAL POST :
Nifty seems to be struggling to cross 8000 levels indicating weakness and a range bound market between 7800-7900 since the last couple of weeks. This gives an impression that a larger correction is round the corner with lack of any immediate triggers.
However, a closer look at the weekly chart tells another story. Having risen close to 1200 points within the last two months from 6850 to 7991, the indices seems to be consolidating within a 250-300 point range. The bullishness in Nifty can be attributed to the following :
1. The loss of momentum as indicated on TTO (Nifty weekly charts below) has not resulted in any serious correction, but a sideways market, indicating a bullish bias on Nifty. Once the momentum turn positive ( trigger line crossing above zero), it will be accompanied by a breakout on Nifty with upward targets.
2. Nifty seems to be making an inverse H&S formation (weekly charts below) with nearing completion of the right shoulder, with a neckline placed at 8000. Any breakout above 8000 gives a target of 9000-9100 within a time frame of 2016.
3. On the Nifty monthly charts below, the trigger line has crossed over above zero indicating positive momentum, after a long corrective phase of almost 14 months. This indicates that all corrections would be an opportunity to buy into and bearish bets should be avoided.
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| Nifty Weekly |
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| Nifty Monthly |
