Nifty – The index opened with a gap up, as mentioned in the last post the hourly RSI was in heavily in the oversold zones. In the later half of the day, sellers took the game and huge selling was witnessed. A bearish flag formation was being set up on the daily chart.
The move yesterday has caused the prices to close below the lower boundary of the pattern, thereby confirming it. Two possible targets can be derived at this point. Fist the small rectangle target, which settles around 10070 – 10000 levels. The second is the flag target that comes around 9850 – 9800 levels. The volumes are increasing on selling days, that further justifies the selling pressure. As on now the index is sell on rise as long as 10635 is protected on the upside.