Nifty 50 Index - Head and Shoulders Pattern Confirmed

Oct 18

On the daily timeframe, Nifty 50 has formed a textbook Head and Shoulders pattern, signaling a potential bearish reversal. The left shoulder formed around late August, followed by a higher peak (head) in early September, and now the right shoulder is completed. The neckline has been broken at the 24,612 level, indicating further downside risk.

Key Points:

• Pattern: Head and Shoulders (Bearish Reversal)
  
• Neckline: 24,612 (Broken)
  
• Immediate Support: 24,459
  
• Target 1: 23,348 (measured move from the head to neckline)
  
• Volume: Increased during the right shoulder formation, confirming selling pressure.
  
• RSI: Currently near the oversold territory, suggesting a possible short-term relief bounce before resuming the downtrend.
  

Projection:

• Short-term downside: The first target can be seen around 23,348, where the measured move would complete.
  
• Risk Management: A close back above the neckline would invalidate the bearish outlook, with resistance now around 24,816.