Nifty took stop at 200 days moving average 5781. Not a good close for bulls today.
Any two consecutive close below 5781 will drag nifty directly up to lower trend line as drawn in chart below. In our earlier post we wrote about this possible pattern which is shown in the chart below. FIIs exited from all long position in index future till yesterday and today fresh short position made. They sold index future worth Rs.1857.98 crores and open interest increased by 11.5% indicating huge fresh short position created today. FIIs sold such huge amount in a single day first time in 2013. Highly bearish day expected ahead. Nifty may slide up to 5600. Below 5600 Blood Bath.
Just see the weekly chart of Nifty below, since 2012 prices were facing the strong resistance of the multiyear upward sloping trend line and moved lower two times. In last month of May 2013 prices have found resistance of the same trend line for third time and turned on downside as shown in the chart below. Momentum indicator RSI showing the strong negative divergence indicating strong down trend ahead. If RSI break below blue trend line as drawn on RSI as lower trend line, we will see fast downtrend.
We are seeing head and shoulder pattern also on hourly chart which neck line has already broken and predicting target 5477. As long as 5931 is protected no body can stop nifty to fall upto 5600 level.
Nifty 5800 call option added 1367900 fresh contracts in open interest indicating 5800 call has been written today indicating nifty will face resistance above 5800 for tomorrow session.
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