NIFTY at critical juncture - Breaking out of Strong ResistanceNifty has been in a correction for roughly 6 months and now it’s breaking out of the falling channel which coincidently intersects a Strong Resistance at the breakout point.
The significance of a Support & Resistance line increases when the price reverses at the same point multiple times.
This Resistance line on the chart is strengthened at multiple points during this correction (TouchPoints marked on the chart).
The cherry on the cake is that the breakout has not taken the price too far away from the resistance line. We may get a good risk/reward ratio if it sustains above the line.
If the price sustains above 17670, it will continue higher with the nearest resistance at 17800 which can act as a target in a smaller timeframe. The next target at 18350 on a higher timeframe.
The chart may actually form Doji’s or Spinning tops because the Resistance is too strong, and also it is the upper line of the falling channel.
Indicators are flashing green with strong RSI and MACD in positive territory.
One should wait for confirmation of breakout above 17670 before going long. If it fails to sustain above the resistance and forms a bearish candle, it can be a good trade opportunity for sellers.
Disclaimer:
This is not buy/sell advice. Please do your due diligence before making any trading decision or consult your financial advisor.
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