Do not buy into this rally.. it looks like a bull trap which is very common in all bear market corrections.
If technical analysis works, I can not think of a stronger sign for a big down move very soon.. 1. Price corrected till golden fib 61.8% level and came down sharp in daily chart 2. It also coincides with the 200 EMA in daily chart. 3. Upward rally is not supported by good volume 4. RSI is touching the trendline even when price is yet to come down to touch the trendline. It shows indicator is not supporting the price moving up. 5. Higher high in price; but RSI made same highs. 6. Price is currently in a upward sloping wedge pattern which is a bearish pattern. Price bounced from the lower trendline of the wedge 3 times. Most of the cases, it breaks the wedge at 4th attemtp towards the downside. 7. The fundamentals are getting worse everyday (covid situation, economy, border disputes)
There is a big gap at 8100 level yet to be filled. If the wedge is successfully broken, price should technically break previous low of 7500 in an ideal bear market. I will be short with a target till 8100 though.
Disclaimer: Market is always right. It can prove any expert wrong any day.
@narpatsinpanwar, You are the one who is going to get trapped in this bear market rally.. be careful.
Ultimate_Trading_System
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I absolutely second this opinion! To add on to the technical analysis part, there is a doji in the weekly chart with overbought conditions! This is the first retracement after the big fall! and there is a bearish divergence in the daily chart! To know more, I have it all here:
For banknifty:
Rather than predicting the target prices, I believe we should react to price action and just manage risks! For most of half of that target mentioned here would be an excellent target! So, react, don't predict!
And then there is another factor - Q1 earnings which will be worst in a long time !
Learner_Nick
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Well that’s exactly the pattern and thought process I have been having since the April high of 9890 which was 0.5. They made it look weak thrice and trapped bears. Everything you mentioned is right but it is highly manipulated market !
So not able to have confidence in technicals or fundamentals, especially the timing of it. It can drag on....
confirmation will only be there if it breaks and closes below lower trendline.
Also Elliot wave followers have a different opinion on targets.
SuccessTrader2006
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@Learner_Nick, that is how they play with your psychology and make you weak. Please keep confidence in your technicals. It cannot fail all the time.
Learner_Nick
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@SuccessTrader2006, agreed ! For confidence also need to have enough capital left though.