Last week in our 'weekly market update' we mentioned that nifty looks like forming a penant or flag chart pattern on daily charts & looks like it is heading towards 8500 if its penant or 8425 if its flag. Nifty moved perfectly as mentioned & made a low of 8406.
Now the nifty has touched support line of flag channel. While doing so it has broken 4 months long support zone around 8480-8540. This zone will act as a strong resistance for nifty & downtrending channel support line will provide support alongwith a gap formed in the month of July around 8350.
Overall nifty looks to be trading with a negative momentum. So any pullback towards 8480 should be used to create short positions with a stop above 8560 targeting 8350. If nifty moves below 8350, further decline towards 8180 looks possible. If nifty moves above 8540, it should move towards 8640.
Now the nifty has touched support line of flag channel. While doing so it has broken 4 months long support zone around 8480-8540. This zone will act as a strong resistance for nifty & downtrending channel support line will provide support alongwith a gap formed in the month of July around 8350.
Overall nifty looks to be trading with a negative momentum. So any pullback towards 8480 should be used to create short positions with a stop above 8560 targeting 8350. If nifty moves below 8350, further decline towards 8180 looks possible. If nifty moves above 8540, it should move towards 8640.
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