Nifty’s recovery from Rs.10,557 has neutralized the immediate bearish outlook put forward by rising wedge breakdown and the short-term outlook would turn bullish should the price find acceptance above Rs.10,786 (today’s high).
The 50-share index closed 0.19 percent on the day at Rs.10,753, keeping the descending broadening channel intact, as seen in the 4-hour chart below.
The Fibonacci EMAs are beginning to curl up in favor of the bulls. More importantly, 8EMA is located above other EMAs, indicating bullish intraday outlook. .
Further, Nifty is sitting well above the Fibonacci MAs, which are beginning to align in favor of the bulls.
The 14-day relative strength index (RSI) is biased to the bulls (above 50.00).
So, Nifty will likely cross resistance at Rs.10,786 on Friday, confirming an upside break of the descending broadening channel - short-term bearish-to-bullish trend change.
However, if Nifty remains trapped in a descending broadening channel, then the focus would shift on the rising wedge breakdown.
The longer the break above Rs.10,786 remains elusive, the more emboldened the bears will become and higher will be the risk of a sell-off to Rs. 10,400 (support of the trendline sloping upwards from February 2016 low and December 2016 low.
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A confirmation of a descending broadening channel breakout is likely and would open up upside towards Rs. 11,000. After all, the long-term remains bullish while Nifty is holding above the rising trendline (drawn from Feb 2016 low and Dec 2016 low).
Persistent failure to scale Rs. 10,786 would shift risk in favor of a drop to long-term rising trendline support of $10,786. Acceptance below the trendline would validate the rising wedge breakdown (bearish continuation pattern) and signal a long-term bearish-to-bullish trend change.
The 50-share index closed 0.19 percent on the day at Rs.10,753, keeping the descending broadening channel intact, as seen in the 4-hour chart below.
The Fibonacci EMAs are beginning to curl up in favor of the bulls. More importantly, 8EMA is located above other EMAs, indicating bullish intraday outlook. .
Further, Nifty is sitting well above the Fibonacci MAs, which are beginning to align in favor of the bulls.
The 14-day relative strength index (RSI) is biased to the bulls (above 50.00).
So, Nifty will likely cross resistance at Rs.10,786 on Friday, confirming an upside break of the descending broadening channel - short-term bearish-to-bullish trend change.
However, if Nifty remains trapped in a descending broadening channel, then the focus would shift on the rising wedge breakdown.
The longer the break above Rs.10,786 remains elusive, the more emboldened the bears will become and higher will be the risk of a sell-off to Rs. 10,400 (support of the trendline sloping upwards from February 2016 low and December 2016 low.
View
A confirmation of a descending broadening channel breakout is likely and would open up upside towards Rs. 11,000. After all, the long-term remains bullish while Nifty is holding above the rising trendline (drawn from Feb 2016 low and Dec 2016 low).
Persistent failure to scale Rs. 10,786 would shift risk in favor of a drop to long-term rising trendline support of $10,786. Acceptance below the trendline would validate the rising wedge breakdown (bearish continuation pattern) and signal a long-term bearish-to-bullish trend change.