Nifty: Triangle Disappoints … Clean Channel BreakdownBenchmark Nifty50 breaks down below the rising channel, which held price up since 30th Sep’20. The index now confirms a series of lower-highs and lower-lows on the 75min chart - sign of short term weakness. The height of the Ascending Triangle now suggests a downside target of (11,600-11,650) for the index which coincides well with the previous swing low. So from a short term point of view we can expect the index to drag itself further down towards 11,600.
Now the width of the rising channel is suggesting a slightly more downside for the index to around (11,400-11,450). This is not good news and we can get some clarity on the possibility of these levels getting tested by the strength of the bounce back. Recently, we have seen the index bouncing back very sharp and recovering lost grounds in just few days. So we should not go outright bearish right now, but be cautious in terms of adding long trades. Any bounce back from current prices is likely to face resistance from the lower edge of the rising channel at the psychological 12K mark.
Trade Well. Trade Wise.
