In the last post, we mentioned resistance line to be possible target for the nifty. Nifty touched the rising resistance line. & reversed to close @ 8866 levels to form a shooting star candle on weekly charts. (See the charts below.)
Shooting star candlestick pattern is typically a trend reversal pattern in an uptrend. But ideally it is a 3 candlestick pattern in which second candle is isolated from first & third candles on upside so we can say that third candle gives confirmation or negation of the pattern. So next week is really important as far as medium to long term perspective of nifty is concerned. If nifty opens gap down on Monday & maintains the gap throughout the week we can say that the uptrend has matured. Aggressive medium term traders can take short position at current level keeping 8970 as a stop.
Daily chart shows nifty is respecting the resistance trend line repeatedly. Last week also nifty reversed after touching the rising trend line. On downside, nifty has strong support zones around 8740 & beyond that 8520. Nifty spent almost whole month of August in in the range of 8500 to 8740. SO it will be important to see how nifty trades around these zones. On the upside rising resistance line can still act as a strong resistance. Soshort term traders can take short position in nifty around 8950 keeping stop of 9025 for target of 8740. Or initiate short positions below 8690 for target of 8520 with a stop of 8750.
