Nifty close 11426.85: The index started this week with a Gap up opening and on that same made a close above the previous swing high (11118.10). That move attracted bulls and today it is up approx. 360 points from the last week close.
Hourly Technical: On the Hourly Chart Nifty is in solid up trend. But the quick sell off on the last hours could be a matter of concern for the Bulls. A near Bearish engulfing pattern has been formed on the chart, which rinses out the half day’s gain. Alongside the Bearish pattern the indicators are also coming down from there overbought level and this altogether may bring back an another correction.
On the indicator side, RSI is above 60, Stochastic is also above 65, ADX is above 55 and the CCI is above 85.
Most of the indicators are in a cool down phase so a correction is expected. Apart from that RSI has negative divergence on the chart which might indulge the correction.
Daily Technical: It is a small uptrend in the Daily chart and as we can see, the correction came when the price crossed the upper Bollinger line. Technical indicators (RSI is above 75, Stochastic is above 90, ADX is at (25) and the CCI is also trading above 150) are in their overbought level and Nifty had a rally of 360 points (approx.).So this correction was expected.
In case the price continues its rally 11600 would be the Resistance for the index and if the any correction take place 11200 would be the possible support.
Weekly Technical: On the weekly chart it is a range break out and the move is pretty much strong as the candle suggest. There would be high chance of breaking the life time high within two weekly candles if the index crosses this week’s high. The momentum of that move would be pretty much strong.
There is also a possibility for correction and the previous resistance (11000 level, now the support) zone may be tested once.
On the technical side, RSI is above 60, Stochastic is at its overbought level, ADX is below 15 and the CCI is just below 300.
So overall, the momentum is there but due to the overbought condition of Stochastic and CCI, there could be a possible correction.
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