Today morning, nifty had given a weak opening , it was 80 points lower from yesterday’s close, however after the first half hour, it bounced back, marking a low of 7494, a tad below the psychologically important level of 7500.
What is interesting here is that in-spite of the strong bounce back witnessed today, the index failed to sustain this strength above yesterday’s low of 7580 and gave a closing lower still at 7572, which is by the way only 29 points lower than yesterday’s close. On the 30 min period chart displaced, we can see a channel breach, in order for this breach to sustain, nifty should be able to move above yesterday’s high i.e. 7635 and close above the same.
On Friday, i mentioned the the occurrence of a bullish Harami Cross on the chart and had said that we needed to await its confirmation, however, the confirmation has failed and the market is still in a very weak position if you look at the bigger picture.
The china index again lost 5% today continuing the saga, removing any expectations of a recovery anytime soon.
Chart of the day
ITC chart has shown a classic Pull Back pattern , which is almost customary post the breach of an important support trendline. It shows the bulls trying to reinforce control, but more often than not, due to the property of Change of Polarity, the support trendline now becomes the resistance trendline and the prices continue to fall.