Nifty Short Term Outlook

On 20th January 2020 Nifty made the all time high of 12430.5 and it was also the open of that day trading session. It mean market didn't made new high and started falling immediately after opening of the market. In this fall it had engulfed previous 5 candles that shows how much bears are strong against the bulls. That bearish engulfing day was the trigger of the impact of pandemic on the country. After that day market start falling sharply and made the low of 7500. Within a month market fall by 5000 point. It had taken 4 year to gain 5000 point but took only 1 month to fall by same point. After making the low of 7511 it has taken a sharp recovery and moved to 11794. Recovered almost 80% of its fall. But once again, on 31st August it has formed a strong bearish candle that has engulfed almost 6 candle. This is the 1st trigger of trend reversal. On the engulfing day, market also broke the up trendline. Breakout of the trendline is also a trend reversal signal. Market also has a strong resistance at 11650. Indicators also suggesting that the market has lost its strength. MACD and RSI both forming negative divergence. On price chart a raising wedge has been formed and market has given the breakout out of the wedge pattern. This wedge pattern also indicating a trend reversal. A Head and Shoulder is also there on the chart, it is also a signal of the trend reversal. Overall scenario is weak, only negative signals are their on the chart. So be careful on carrying your long position. We are expecting 10500 within this month. Fall may be continue to the 9500 level 50% retracement level from the low of march (7511) to the high of august (11794.25).