Nifty forms a “Bearish Belt Hold” Candlestick pattern indicating a possible reversal on the Index and market sentiments. Fueled with volatility, Bulls extended the breakout from 11170 to 11383. The two days post breakout saw a good buying momentum in terms of overall breadth and buying in the broader market but it is in last two days we have seen some decline in breadth vis a vis momentum in the Market. The price action has been muted with marginal gains while it has become hard for bulls to take off the day’s high with volume.
Global markets have been giving positive cues as S&P500 and FTSE100 have been up for the fourth consecutive day. Better Retail sales and much better than expected core retail sales are aiding the bulls from lower levels. Though Back here in Asia we have seen fall in China’s industrial output to 17-year lows. Crude oil also saw some buying as it was trading near the highs of $59. This may have some repercussions for sentiments in equity markets.
This can call for some cautiousness as the consolidation or the due profit booking becomes clearly overdue as well on charts and it may trigger anytime.
Further, Bearish belt hold is a reversal pattern that usually signals aggressive bulls or to at least indicate to worry about position size as the shaven head indicates clear resistance on the upside.
At this time we would rather be cautious and remain abeam and look to utilize the opportunity to enter on some decent dips.
Eveready Inds – Stock is making a flag pattern on the daily chart after a furious run up from lower levels of 190 to 220. This consolidation makes it healthy for the next leg of upmove with a target of 225 and Sl of 200
DCM ShriRam – Stock has given a breakout from a short term sideways correction on the daily chart. A pin-bar pattern was seen yesterday and post that we have seen a buying follow up. This indicates we may see some bullish move in the short term with a target of 505 and SL of 445.
NBCC – Stock has given a breakout from a double bottom pattern on the daily chart with much higher volume and closing above resistance. We expect this breakout to be decisive and take stock much higher to levels of 69 – 72 with SL of 61
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