Nifty witnessed a negative closing ending the week 355.60 points down or 3.53 per cent down.
Lets analyse, why ?
Technically , if we go by analyzing past three week candles, they were all indecisive candles,suggesting both bulls and bears are fighting for their runs. let see what are those candles.
1. Doji - Indecisive candle
2. Shooting Star - Indecisive candle
3. Spinning Top - Indecisive candle
Hence candlesticks patterns were giving us clue to stay cautious from past three weeks.
Now let observe some other patterns on the charts ,
Channels: Nifty is trading in a up trending channel and the candles we were talking above are formed near or at its upper channel.
Harmonic Pattern: A harmonic pattern called ABCD was also witnessed on the weekly chart , suggesting supply zone @10030-10050.
Indicators: Rsi was also overbought on its weekly chart and at the same time divergence can be observed on its daily and hourly chart.
Hence we had many factors, supporting this fall.
Now , what next ??
Since the patterns are strong on weekly chart, the recent fall may accentuate further .
Following are levels that going to be crucial this month
Currently index closed right at the support i.e 9700 -9720, if it manages to hold 9700, it might see some bounce back till 9800 or 9900 levels.
But if it breaks this 9700 or closes below it , the next level to watch would be 9590, 9530, 9400, 9000.