Nifty opened gap up of more than 250 points on Monday soon after government’s decision to slash effective corporate tax was announced on last Friday. Nifty rallied close to 1000 points in 2 trading sessions. This is a feat which has never happened in the history of the Indian Stock Market.
After a euphoric move, Nifty entered in a consolidation in the next four trading sessions. Presently it’s trading in a Symmetrical triangle pattern and break either side may lead to fresh momentum.
Probable support in the short term comes at 11450-11500 and probable resistance comes at 11600.
Technical parameters look strong as of now and sustainable move above 11600 may lead to further strength in the short term.
In the daily chart, Nifty breaks out from two months of consolidation with a breakaway gap suggesting underlying strength in the index.
Presently Nifty is trading in a Flag pattern and likely to consolidate for few days before fresh breakout. Probable resistance on the upside comes at 11650-11700 and probable support comes at 11400.
Most of the technical indicators including Stochastic, CCI are trading in a overbought region while RSI is trading close to the overbought area suggesting strength from technical parameters.
In the weekly chart, Nifty has formed a spinning top candle and placed right between crucial resistance of 11700-11750 and crucial support of 11350-11450. Break either side of the range may pave fresh direction of index on a broader basis. Technical parameters have started to turn bullish in the weekly chart.