Thursday, January 19, 2012

Reaching the pattern targets

An ascending triangle identified on the Nifty a few days ago has now touched 5000+, within distance of 5070 which is the target for the pattern. Once the target is met (if), Nifty chart will be open for development of new patterns.

But,

The fact that an ascending triangle developed at the bottom of a bear decline carries some significance. After all, an ascending triangle is a bullish reversal pattern. We can only guess on the nature of reversal - short term or long term? since the triangle developed on the daily chart it's targets were modest. Therefore, it should carry short term significance. We should continue to assume that the short term trend is up until proved otherwise.

What happened to the bearish wedge? This pattern is now in danger of changing it's shape if there is any more rally in Nifty prices. It could then become a regular up channel which would have a different meaning a altogether.

To sum up: the short term trend is up. A reversal pattern is required to change this trend.

9 comments:

sriram said...

Sir, If nifty moves to 5050-5070 then what happens to bearish wedge, can it be ignored? or if nifty falls 50-70 points from 5050 or else from 5020 then wedge pattern can be considered or not, explain?

Poonam said...

Hello Sir,

This series has surprised me. At the very first week of month, everyone was so bearish that we got targets of way below 4200 on Nifty & 6600 on Bank Nifty. But markets took a U-turn from and lower levels and declined to decline. Then came the RIL buyback news at levels where stock was about to break down, which I guess a pure play to save the stock price. Lets see if we can get third surprise in a row by RBI governor. Who knows it is on positive side or negative. Regards

Naran said...

I THINK A CLOSING ABOVE 5200 WILL CHANGE THE TREND OF MARKET AS POSITIVE...

sriram said...

Sir, you have explained V-chart Pattern can not sustain, considering this, L&T formed V reversal from bottom around 970-990, and it is facing resistance at 100-EMA 1290 levels. any short sell on this? pls explain sir.

Tomichan said...

leave the 5000 put unattended today. Leave predictions and look at the projections by charts. Predictions are meant to satisfy mind and may fail to satisfy. Ultimately, projection is the winner. Now the projected target is 5070 and awaiting for the next move next week and that will seal my fate in the coming days.
Salute master.

rajiv malik said...

Film personage Ajit rues, "Mona Darling, Inko sabko Reliance dilwa do. Result jeene nahi dega aur Buyback inko marne nahi dega."

RAKESH SUTARIYA said...

Dear Sudarshan sir
I am a regular follower on your blog for past many month’s. sir pls
Write some thing more on Actionable Analysis. I just start reding your book.
I am thankful to Sudarshan sir for writing the book for us.
And I wont to khow on Actionable Analysis pls…
Rakesh sutariya
Sutariya.r.k@gmail.com

Tomichan said...

Reliance buyback ploy single handedly pulling market for the last 3-4 days...Has strong hold on market. Then which stocks will initiate decline? Or market as a whole in sudden? RBI is the next trigger to get a directional call either way breaking the support/resistance.
Salute master.

Naran said...

Inside day ????