It is again at the lower end of the last two and a half months trading range and now the million dollar question is will it bounce back from here OR breakdown.
I am looking at 10700 closely if the Nifty closed below the level for more than 3-4 days the possibility of a breakdown is higher than a bounce back.
The Trend Momentum: The ADX is showing a reversal. A close & continuation below 10700 will strengthen the trend on the downside.
The Fear Factor: INDIAVIX moved up by 4%+ on Friday, the last trading day of the week. A crossover on the MAs will be Bearish.
There will be few factors I would keenly watch on the chart below –
- Technically speaking, the formation is a right-angled triangle with rising bottom and should have a bullish breakout. But the price action is speaking something else. A close below the rising trendline will be bearish. More so a bearish resolution of a bullish pattern is never a good sign.
- The short term PPO(5,10,4) has whipsawed much in the last few weeks. A close below the zero line would be a better indicator of bearishness.
- The medium-term PPO(12,26,9) is in a bullish crossover position and below zero. A bearish crossover will signal a bearish bias, more so as it is below the zero line.