03 May 2015

Nifty : Dead Cat Bounce Ahead?

While looking at the daily charts after a really long time, apart from a clear Head and Shoulder pattern what you can easily see is strong resistance in the 8500-8600 region while support can be expected around 8000.

I also see some divergence in the oscillators and would be reasonable to expect some rally after such a strong selling. The fact that long term trend is still intact, I expect the current correction to be of zig-zag type. So either the correction has almost ended (which I doubt) or there is at least another leg down; which can only start after a leg up from current level. So after a 1000 point correction, an upward correction of 38% to 50% is expected. Interestingly a 400-500 point does coincide with the Resistance!


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