Week Ahead: The near term trend of Nifty is down; Upside bounces are lacking its strength | Nifty: Nifty is expected to retest the swing low of 10,275 levels | Indianotes.com

Weekly Timeframe: After showing sharp weakness in the last couple of weeks, Nifty shifted into consolidation during this week and closed the week with flat note

– A small body negative candle has been formed this week, as per weekly timeframe with long upper shadow. Technically, this pattern is indicating a failed upside bounce in the market and instability of bulls to sustain the highs

– Presently, Nifty has placed at the key lower support as per weekly timeframe (uptrend line, connecting swing lows and 20w EMA) ~ 10,400 – 425 levels

– The weekly chart pattern is also indicating that the weekly support is unlikely hold for long, and eventually this support is going to be broken sharply

– The last week’s opening down side gap is still intact ~ 10736 – 10702 levels and this gap could be considered as a bearish breakaway gap. Normally, bearish breakaway gaps are associated with important top reversal patterns

– Weekly 14 period RSI is moving in a bullish high low range of 75 – 40 levels and is now placed at 54 levels. As per its range theory, its further weakness from here, could lead this oscillator to slide down to lower 40 levels. Such expected pattern of RSI could coincide sharp weakness in Nifty

Summing Up:


– The near term trend of Nifty is down and upside bounces are lacking its strength. The range movement of the last few sessions is expected with downside breakout in Nifty soon

– On the decline below the support of 10,400 levels, the Nifty is expected to retest the swing low of 10,275 levels or below in the next 1-2 weeks


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