Nifty on the brink to reverse

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Nifty is currently approaching near cluster of resistances which is long term downward sloping red trend line and 200 DMA placed at 8380 levels. As of now there is no reversal in this index, but the momentum on the upside seems to exhaust. A trend reversal will occur only if the level of 8200 is taken out followed by 8100 which is the previous lows. It is imperative for prices to reverse as it is moving precisely in a downward sloping red channel since the top was made at 9119 levels. At present it is hovering near the resistance of the red channel. However, there is no reversal on daily chart or any smaller time frame.


On 60 mins chart, prices are moving in a positive direction by forming a higher highs and higher troughs. As of now it is quoting at the resistance of the upper trend line, it is also failing to cross it decisively from past three trading sessions (EOD) giving an indication there no vacuum on upside. An expanding triangle can also be seen on hourly chart.

As per wave theory, prices are moving a complex correction (a-b-c-x-a-b-c). Currently it is moving in the form of wave x, which is also a corrective pattern. In wave x, from bottom of 7560 prices are moving higher in the form of w-x-y pattern. In which wave y is forming an expanding triangle pattern. Wave e of wave y of wave x seems to be at its last phase.

In short, the trend is positive but it is on the brink to terminate. Any move below 8200 will open negative possibilities. Prices need to discontinue the higher highs and higher lows for trend reversal.

Nifty 60 mins chart

Disclaimer: Please do not circulate this report to Clients and others. The motive for this short term update was to make aware of various patterns and its implications and how it can be used for forecasting various asset classes. Do not trade on this update or take any positions based on the above mentioned view

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