Dated :- 21.08. 2016                                 NIFTY SPOT : 8666.90

Nifty is moving in the range between 8598 to 8702 as was mentioned in my previous blog.

On closing basis it respected the smaller range mentioned by me of 8630 to 8680.

It was mentioned in my previous blog that first day of the previous week was very important. If Nifty could not close above 8702 in that case expect Nifty to trade with -ve bias. Same happened. Nifty did not closed above 8702 on first day of previous week and thus traded with -ve bias throughout the week.

Another important thing I would like to highlight to the readers is that Nifty is making very important patterns -

1.  On weekly charts there is three hanging man pattern. With the fact that the last hanging man (i.e. of the last week) is also insider hanging man to the previous week. In other words last hanging man is insider bar also. It is a very rare pattern and important also.

2. On daily charts Nifty is making diamond pattern. Which is also very important pattern.

Thus, the combination of the two patterns together with other signals gives clear signal that the range between 8702 to 8598 is now become more important.

Expect a good trading move on break of this range on either side comprehensively on closing basis.

I would also like to add here, that, in case if Nifty breaks this range on down side than the quality of  that breakdown will be comparatively better than to the breakout on up side.

Now What -

As mentioned above Nifty has made triple hanging man pattern on weekly charts and diamond pattern on daily charts.

Together with the placement of indicators it is indicating that now the time has come for Nifty to take a move.

To take benefit of that move one should keep an eye on the levels. Levels are 8702 on the upper side and 8598 on the lower side on closing basis.

Further narrowing down the range on immediate basis to 8630 and 8680 which will guide that which side of the market one has to be.

Expect Nifty to break the range in coming week. Which will be the opportunity to trade also. I feel that it will be better for the market and Nifty itself to break the range on the down side to complete its path.

I am again mentioning here my observation which I mentioned in my previous blog also ;-

Observation -

Since Nifty crossed 7800, till now it is doing one very interesting thing.

Which is that, it has always taken support dot i.e. dot at the support levels that too on the first support level and moved up again from there.

It has never even tried to break any support levels. Not breaking supports is ok but taking support dot at the support level always is not such thing which one should take lightly.

This indicates that sooner or later this thing is going to violate and in that case down move will be more that the first imagination, you will find Nifty shedding 300-400 points in short period of time.

Also have a look at Nifty Mid Cap index 50. It was making bearish rounding top formation and few days ago it broke that pattern on the up side.

Bullish breakout.

But it do not have a follow through after that, it is standing above the breakout point and consolidating there. Keep an eye on that it will give good feed for analysis that which side of the trade one should be. Because if it does not sustain there and hold the breakout and starts falling than it can be ugly and painful for traders.

Note :- All Levels are Nifty spot levels always.