$NIFTY: Watch out for 17200-17215 zone

abhi1invest Updated   
NSE:NIFTY   Nifty 50 Index
$NIFTY is a no brainer in a downtrend.
However, last sessions have seen an upside push.
So the question that is bothering every one is whether the down trend is over?
Well! only time will tell whether the downtrend is over. The last swing high on 1 hour time frame is a crucial in answering this question.
If price breaks this line/zone on the upside and retests it before continuing upside, will establish the uptrend. However, a failure to do so will continue Bear slapping the price down.

What is my take?
I have this hunch that a Pole and Flag pattern is likely, i.e. price will reach the 17200-17215 zone or very close to its lower end, kind of forming a double top pattern and reversing from there.
If this happens, we should be ready to see further downside, at least to the last swing lows of around 16860. If this low is broken then downtrend will continue.

Why do i think that pole and flag pattern is likely?
Call me cautious, but in each of the two days, there has been strong selling pressure. Which clearly indicates sellers are strongly holding the 17200 positions.
I have a feeling that on Monday, we are likely to see a gap up closer to this zone, the price touching it before sellers pushing the price down. Only if the buyers are able to keep the market up above this zone towards the end of day, either on Monday or Tuesday, then we can see trend reversal. I am not sure about the second half play. SO i will play as per trend.

Finally what to expect for Monday?
- Gap up closer to 17200 level
- First half Bears will push the price down from 17200 levels
- Second half bulls may/should come back if the trend has to reverse, if so we can get a small doji. If Bulls dont come back in second half expect a red candle.
Interestingly, instead of a Gap Up, we saw a gap down today. This indicates Bears are playing offensive. This is inline with i had mentioned in the post above: First Half Bears will be oppressive and second half we will wait to see how strongly buyers come back.

Another interesting thing to observe is that Nifty has formed a double bottom pattern with two long tail rejections on Daily Time frame, which is a positive sign. This shows Buyers have been able to defend the lows of 16850. However, Since today's candle is was not a Doji, Bulls still need to put more effort to push the market to 17200 levels. This means we are still in Negative sentiment.
Next target level is the level of 17122. Bears are holding this level as the first barrier to defend.

If Price breaches this level then 17200 is likely.

So what to expect for Tomorrow:
- Gap Down again likely tomorrow.
- I am assuming buyers to play offensive tomorrow. Hence we can expect a small negative rally at the start of the day, but Bulls should try to reverse the trend in the first half.
- Watch out for the Bear push in the second half of the day. If Bears come hard, we can expect an inverted hammer candlestick. However, i dont think we should see a close below 16850 levels.
After double rejection from 17200 levels, $NIFTY has not broken its previous days low. Also, it is on the border of a buy zone. So for tomorrow, my expectation for $NIFTY is to touch the lows of 17017 and then reverse.


The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.