Nifty had been quite volatile in last few sessions between 9400-9500 but during this course, as as expected in my last post: Is Doji Indicating a false breakout? , Doji did confirm bearish reversal pattern “Evening Star” on daily chart. What did confirm Doji? ….Red candle on 18th May which closed 50% below green candle just prior to Doji and another red candle on 19th May which made lower low and lower close than the pattern as whole
So as we can notice in daily chart above, Nifty has clearly giving Evening star bearish reversal and its approaching crucial level of 9370 which is 20 day SMA (Support intact since dec) and also trend line support stretched from December low. So next week being expiry, do watch out for 9360-9380 as strong level to go fresh short.
But now lets look at weekly chart….
Interestingly, On weekly chart we have got a Grave Stone Doji right on the top which means we can even get another evening star pattern. If we close below 9355 in next week than we can expect 8980-9080 in June which would be just a 38.5% correction to previous rally. On the other side Good results from PSU Bank and GST is would try to resist fall but we need to wait and watch whats unfold next week.
Strategy for Traders: Short 9500 CE May and Buy 9300 PE June tgt: 9210 sl :9580 on closing basis