In yet another week of consolidation, the Nifty 50 Index stayed in a broader range of 15,700-16,400, ending near the upper edge. The index is on the verge of taking out key resistance at 16,400. The volatility also declined during the week. India VIX fell by 7.01% to 21.48. The index has stayed in the same range for three weeks in a row now, and it is making visible attempts to inch higher.
The index has stopped making lower lows and formed a strong base at 15,700 levels (‘triple bottom’) and is currently trading near an important resistance of 16,400 – which will likely be broken with a gap up opening today and is expected to act as support going forward. Breakout of this level (after pullback) will confirm a trend reversal after a good accumulation phase. This will also activate the XABCD pattern with potential targets of 17,000 and 17500/600. If the index fails to sustain 16,400, it will go back to the range in which it has been trading for the last 3 weeks.