Technical Analysis of Market

My charting software has some problem and not opening where i have all my studies that why any updates are not posted i am posting this update as market is at very critical level i.e. make or break level.

Nifty has been showing signs of weakness from last so many weeks. It has been making lower lows and lower high which is clearly an indication of weakness. Whenever we see intra day movement in nifty when ever any up move comes it is being met immediately by sellers which is clearly indicating that bears are becoming strong day by day and bulls are trying every ammunition in their arsenal to check mate bears and so far has not been successful, once the resistance is broken decisively then we can expect a violent fall in the market.

Nifty has moved below 200 day EMA in may 2015 and then went up and faced resistance at 50 day and 100 day EMA and then started to move down and again moved below 200 day EMA. The resistance offered by 100 day and 50 day EMA is clearly a sign of weakness. So now nifty has to move above first 200 day EMA and then 100 and 50 day EMA to indicate any strength. Nifty has moved below 200 day EMA twice in 30 days which has happened in august 2013 and in 2012 which is clearly an indication that we might be seeing weakness which has not been seen in last one and half to two years. Another sign of weakness is 50 day EMA has moved below 100 day EMA and the distance between them is slowly increasing indicating that the pace of fall is going to increase in coming weeks unless and other wise bulls stage a spectacular fight back.

Nifty has formed one H&S pattern and the second one is on the verge of completion.

First H&S pattern

As can be seen from the above nifty has formed an H&S pattern broke below the neck line in last week of april and then moved up and exactly found resistance at the neck line and started to move down and is moving down which is a perfectly H&S pattern set up and the minimum target comes to around 7500 levels nearly 600 points from current levels will it go there it seems to be.

Now we see the second H&S pattern.

As can be seen above that nifty is forming a H&S Pattern and is on the verge of breaking the neck line. The neck line is at 8000 which has offered support two time earlier and we have to see if the same offers support now also. If the neck line is taken out the we can expect a violent fall towards first 7500 and then to around 6700-6800 levels. So it seems that 8000 is the make and break for nifty as it just near it we should be very carefully watch the same any breach of same would be party for bears.

Mahiidar M

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