Nifty has formed Rising Wedge pattern on Daily chart and breakout has already taken place. We normally use 10,20,50 or 13,26,55 EMA combination to analyst any asset class. We just changed our analysis this time to understand whether market is able to uphold EMA of Low's made during uptrend. Logic of using EMA of low is to understand the strength of market to move up from any minor correction. If market is unable to hold/bounce from lows or EMA's of lows made during uptrend then bulls might not be able to hold the uptrend. Surprisingly, Nifty bounced 2 times from 10 EMA of lows made during uptrend. 20 Days EMA of low is 11530 and of close is 11580. Index has given first signal of break in uptrend when it close below 10 EMA (low) and second when it broke out of Rising Wedge pattern (trend reversal). Target of the pattern is 11300 which is close to 50 day EMA and support of 11335. Stochastic is showing negative divergence.
We view correction in market from current level and expect market to test 11335 and 11100 in next couple of trading sessions provided Index holds 11761 as resistance on closing basis.
We view correction in market from current level and expect market to test 11335 and 11100 in next couple of trading sessions provided Index holds 11761 as resistance on closing basis.