Dated :- 03. 05. 2015                                 NIFTY SPOT : 8181.50

Hi,

Readers,

Nifty is coming down and down as expected.

Now Nifty is hovering around 8200 in spite of the fact that it has given bearish breakdown of big Head & Shoulder pattern. Because Nifty is taking support on its trend line and on smaller time frames charts Nifty is oversold.

Other technical facts are Nifty has also given bearish breakdown of double top pattern in monthly charts which is very important.

Now let me explain it in detail :-

Nifty has taken support on its trend line at 8150. This is the trend line of the original up move which was started from 5100 in August 2013.

This is a major trend line and as per my analysis and as per the current setup of Nifty, there is high probability that Nifty may ultimately respect that trend line for once. Irrespective of the fact that Nifty has given big bearish Head & Shoulder pattern breakdown. That was also one of the reasons that in my previous blog I mentioned that book full profits for once in all short positions created around 8800 levels together with mentioning that nothing moves in straight line.

Now, if Nifty stays above 8210 comprehensively then expect rebound in Nifty in which case the next resistance is at 8420 – 8450. Nifty is also making +ve divergence on hourly charts which also supports and ready to force rebound. Nifty is also on the lower end of the Bollinger band on daily charts which also indicates support.

In case if Nifty stays above 8210 comprehensively and confirms the rebound then 8080 will be important level till the time it is protected on closing basis rebound is on and break below that will reduce the chances of rebound. Any rebound which may come shall only be a technical rebound. Overall  chart structure is still sell on rise till the time 8700 is not taken out.

Looking at the chart structure further immediate fall in Nifty can only be possible if Nifty breaks 8100 with big red candle i.e. run through with severe fall. Also with the second condition that after breaking 8100, Nifty without even crossing 8200 goes below 8000 and stays below that.

Trade accordingly.