"Nifty was making a bullish pattern in hourly charts having resistance at 2875-2880, breakout from where Nifty may target 3050+ in coming sessions where as failure to cross this level can target 2500 in coming weeks. " Nifty, which had closed near level of bullish breakout on Friday (30th Jan 2009) which would have targeted 3000+ of Nifty, opened with a down gap of more than 40 points on negative cues from US & Asian markets & failed to cover the opening gap. Nifty drifted lower gradually to touch an intra day low of 2760, thus moving below the support level of 2770 after Nifty had made a "Double Top" pattern around 2880.
As far as, EST charts are concerned, Nifty has made bearish "Double Top" pattern & another close below 2775 can easily target 2740 & 2680 of Nifty. However, technical recovery to 2798-2822 cannot be ruled out since Nifty has declined sharply from 2882 to 2760 in few hours only. Since many important stocks are ripe for technical recovery, Nifty is likely to recover before achieving the bearish targets of 2680 etc.As far as Bar reversals in Daily Charts are concerned, Hero Honda and Guj NRE Coke have given Upward Bar Reversal in Daily Charts while stocks like Reliance, L&T, Suzlon, PNB, Maruti, Rolta etc have given "Downward Bar Reversal"
Sector wise, most of the infrastructure stocks like DLF, JP Associates, HDIL, IB Real Estate, Rel. Infra, Unitech, Ansal Infra stocks declined sharply in addition to many housing finance, banking, power, metal, steel, IT education & sugar stocks. Only few stocks like Satyam, GE Shipping, HPCL, Spice Mobile, Indiabulls, Gail, etc. closed in positive territory. As far as A/D data is concerned it was in favor of bears in the ratio of 8:3 with 860 declines & 336 advances during the day.
In nutshell, Nifty failed to cross the crucial resistance of 2880, while making a bearish "Double Top" pattern having support at 2775, violation of which can target 2680. But in the meanwhile, Nifty is extremely oversold in hourly charts & technical recovery to 2798-2822 not ruled out where a lot of profit booking is likely to take place. On bullish side, Nifty can attempt to touch 3000+ only if it closes above 2925 for 2 consecutive days. The best strategy should be to book profit in stocks which have given bearish breakout in hourly charts & light buying is advised in oversold charts which may recover along with Nifty.
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