Nifty: Wedge break

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Nifty Daily chart

Nifty last week witnessed heavy selling especially after the budget. Prices which were moving in a wedge pattern has finally given a negative break. It not only broke the boundary of the pattern but also closed near the low of the day which is negative sign.

From retracement perspective, price rose more than 61.8% of the previous fall from 12100-11600 levels. This now can be termed as a flat pattern (Wave Theory) If wave a (12100-11600) was a three wave structure and wave b which is a three wave structure (w-x-y) then wave c will be five wave structure. This wave c can take prices near to the end of wave a which is close to 11600 levels.

In short, Nifty is in a bear grip and can witness selling pressure in coming week dragging prices lower till 11600 in near term.

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