DAILY TECHINICAL ANALYSIS
Nifty – Follow three!
After the FED, BOE-ECB-SNB all followed with 50 bps rate hike. That is clearly follow three. What is interesting is the follow three pattern in Nifty. The recent fall resulted in the last three days of rise and then comes bolt from the blue. The last three days rise captured in single day, aka three-line engulfing pattern bearish. Priming to perfection through price. It does not end there. The expected or the probability of HnS pattern is increasing and a close below 18380 (high probable) opens up the scope towards the 17880 area. That has been the base to the entire up move in recent times. The last one year of the bear market is near a year completion globally, while we were part of it till around July. The usual Christmas rally looks now to the history books. Also critical is the Niftybank joining the down move that increases the probability of down move. The Services sector components are looking weak (not all though). For the day remain short below 18550 (that can be the trailing stop for the shorts left if any), a close below 17380 (demands addition to the shorts) 18180 is the min run in this. Temper the recent parabolic space as they are more prone to the profit taking.
Niftybank:- An evening star, rising rates
As the din towards rising rates gather the chorus, markets expectation of pause or pivot in the fear of recession gets a huge whack. Was it anticipated, were there inputs to protect one`s positions/capital. The answer is yes, if one can read the leaf of financial markets. Abundance of care is not required if an ounce of observation can be made. The Regression line broken (PIP Chart), intra-day channel broken. Now in the daily the evening star. A close below 43300 warns of deeper move of another 1000 points. This space is crowded in recent times with every boat rising to the tide. There arises threat of profit taking. Add to this the sentiment else where, the HnS bearish in nifty and its components the picture is suddenly turning towards sell rally. 43800 now caps while 43300 direct closing is more bearish. Sell with average stops 43800 is what one can approach.
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