Gem23
Short

Bank Nifty and Nifty50 expected to resume southward journey

NSE:BANKNIFTY   NIFTY BANK
In my continuing series of the Head & Shoulder pattern that has emerged, I had given a view that short term recoveries are part of a bearish trend , consolidating the right side shoulder. In the chart, it is presented with the three parallel channels.
The first two had three green candles each, followed by a sharp fall. The last one (from 5th April till today 10th April) has achieved 4 successive green candles, with the last one being a weak doji like candle. Last time the index had achieved more than 3 consecutive green candles (from 19th Jan to 29th Jan) - a total of 6, the Nifty and Bank Nifty had fallen sharply, giving a clear Head for a H&S pattern to emerge - thanks also to the market-unfriendly budget and US interest rate scenario.
With buying support waning, resistance level of 10420 not crossed plus RSI weakening all indicate a fall of 3-4% in the next 4-5 sessions. Nifty can test 10100 again and Bank Nifty can go back below 24500. Please secure/hedge your long positions appropriately.
Also watch the 4Q results closely over the next 2 weeks. Expectations are high, so disappointments can make bigger dent in the market. But positive surprises can arrest the fall in the index.
Also to watch carefully are the indicators coming out from Karnataka elections.
US is bringing out one new issue every week! Till last week, it was trade war with China, before that Fed rate decision, and now at the last stage of yesterday, the news of US investigating agency's raid on US President's lawyer seem to have dented the progress of the recovering US indices last night. Watch this space carefully.
Keeping some cash aside for opportunities to buy lower could be one option in the short to medium term.
Surprisingly stable is the INR-USD exchange rate!
Happy trading. Happy investing. Protect your money.
I would rather go a long call on bank nifty as it has traded the whole day above the trend channel..we should see a move till 25450..
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