Dated :- 18.09. 2016                                 NIFTY SPOT : 8779.85

Nifty rebounded sharply and readers would be happy that they were able to exit at proper and appropriate time when I updated the blog on Sept 15, 2016 during the market that if Nifty does not closes below 8690 then book profits in short positions and close the short positions and step aside. Next day Nifty rebounded and made a high of 8847. This is how the technical analysis helps being on the right side of the trade.

See, breakdown or breakouts is important events and they should and must get the follow through. If follow through is missing then by nature it is expected to take a reverse move. Because it means that it is not sustaining and thus the reverse move is expected.

Now What ;-

Nifty is making some bearish patterns which I also mentioned in my earlier blogs.

To name a few patterns which are commonly understood are -

          1. Shooting star pattern on weekly charts with gap.

          2. Island reversal pattern on daily and weekly charts.

          3. Falling wedge pattern on weekly charts.

Nifty fell sharply on Friday which came from the Island reversal pattern as Nifty was not able to break that pattern. Remember Island reversal pattern which is bearish pattern is still on. Till Nifty is closing below 8859 the bearish Island reversal pattern will remain on. It is a strong reversal pattern.

We have important market moving event of FOMC meeting on 20-21 Sept where Yellen will decide on intt. rates in U.S.

Now how to approach Nifty in coming week Taking into consideration the above bearish patterns -

The level of 8808 on the upside now becomes very important for Nifty. Till the time Nifty is below that it is expected to be bearish. Means till Nifty is below 8808 Nifty is expected to be bearish and expect lower levels. Once Nifty crosses 8808 it will become in a range and wait for FOMC to give further cues. Range is expected to be 8635 to 8918.

Trading Strategy would be to play on sell side that is bearish side till Nifty is below 8808 and once Nifty crosses 8808 expect it to be in a trading range and volatile one. That will be the time to trade less and stay on side lines because the volatility is expected to be high.

Trade accordingly.

Note :- All Levels are Nifty spot levels always.