- The formation of upside recovery type candle pattern of last session has witnessed reasonable buying interest in today’s session and Nifty closed the day higher by around 32 points.
- Nifty opened today with slight positive note and shifted into further sideways band with positive bias for better part of session. Finally, the market showed positive note towards the end.
- A small body positive candle has been formed today, which is suggesting minor upside bounce back in the market. This pattern seems to be a short term reversal pattern, but further follow-through buying by next session could only confirm the reversal pattern.
- The positive sequence of higher tops and bottoms is still intact and the present chart pattern is indicating that yesterday’s low of around 9075 levels could now be considered as a new higher bottom of the sequence. But, this higher bottom needs to be confirmed with subsequent upmoves.
- Daily RSI has turned has turned up from near 50 levels. Now, we observe a formation of DD+ (positive reversal pattern) in Nifty/RSI (higher high formation in Nifty of recent two legs and lower high formation in RSI). This positive signal and could indicate the possibility of resumption of upside momentum of the market very soon.
Conclusion & Strategy:
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- Today’s minor upside bounce back could be some cheering factor for bulls to make a comeback in the market. Further follow-through buying action could only strengthen the upside momentum and that could possibly indicate the reversal pattern in Nifty.