Nifty May 06,2013

Above is the Nifty daily chart since its decline from Jan 29, 2013 (RBI credit policy). That day it had formed a shooting star. The latest credit policy on May 03, 2013 was a Harami day, as seen at 4. However, Nifty has shown sufficient strength in its rally since 15th April, and as we shall see in a next post on its longer term direction. It has now come out of the downward sloping channel. Points 1-4 are four moments of weakness in the current uptrend.

Nifty, has in the immediate, shown two Harami days, which is a sign of indecision/ negativity. We were expecting it to break downwards today with the line L1 as target, after the first Harami. However, it declined the offering. And it is at a support line. If we see its hourly chart, we do feel that there is a good chance that it shall move up tomorrow. It remains to be seen.

In any case, the downside is limited only to the upper chanel line, i.e. Nifty somewhere near 5800-5825 or so. This level is a 38% retracement level also. Also, it could also be forming a inverted H&S if it does come down.