Thursday, August 14, 2008

Nifty - Warning ...Caution Ahead !

The Nifty broke the important intraday support level of 4465 and fell further to close weak at 4430. In fact the trendline support on daily charts was broken yesterday itself.

Being the last day of the week , i was tempted to see the weekly chart and it suggests caution - extreme caution!



On the weekly Nifty chart, there is a 'bearish engulfing' candlestick pattern which indicates a halt to the past few weeks of upmove. Technically it is a reversal pattern and one should expect further selling pressure in the week to come.

The entire structure would fail only if the current weeks high of 4650 is broken on upside especially with volume. On lower side, likelyhood of downward targets near 4330-4270 is more likely in next few days.

Happy trading

CA Rajiv D Khatlawala

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