Friday, May 18, 2012

Nifty has a reversal day

The Nifty had a bullish reversal day, today (Friday, May 18). The Index opened with a down gap, moved lower, then rallied to close the gap and actually close higher than yesterday. Chart for the Nifty is given below.
Bullish Reversal days suggest at least a short term up move may be coming.
But, the reality of the market is different.
In the chart below I have marked two earlier bullish reversal days at A and B which did not have any bullish follow through. The pattern by itself (without further context) has limited forecasting ability. Today's reversal may well have some follow through because the Nifty is deeply oversold.

Here is the Nifty chart.



 

5 comments:

Rajveer said...

Yes, the nifty will have a follow through because, today, there was first instance of agressive short covering which followed upto the last minute of close. This was classic case of Bullish engulfing and a higher close. Gap up and a higher close will confirm the short up trend on monday.

Akash said...

HI , SIR MY QUERY ON BHEL , WHAT IS WRONG ON STOCK , GOLDEN PSU , EVERY DAY HIT 52 WEEK LOW ,RULES IF STOCK HIT 52 WEEK LOW, DO NOT BUY , WHAT CALL ON ? LONG TERM INVESTER CAN BUY ? CUURENT LEVLE ?

Rushabh Shastri said...

You rightly said when topic was for 4531 nifty "can the nifty decline to 4500"....trader never be too much bullish/bearish for market...only one thing they can do...just listen to the market

Dinesh Rishi said...

Thanks Sir

for the ray of hope for Bulls,

ANAS said...

Respected Sir, its me again...

With all due respect to you and your priceless wisdom,

i believe that the candlestick on day "A" was not a bullish reversal pattern .

as technical analysis is an ART and not Science, my observation tells me that it was a THRUSTING candlestick line.

Kindly correct me if I am wrong. {as i am a human}..

Thank You for your precious time...

Anas Elias Batla.

Kolkata, INDIA..