Humpty Dumpty Finally had a great fall from the 8550 wall! But for me this fall was interesting as it was anticipated on charts since long time. In my last few posts, strategy had remained to be Sell on rise while for safe traders i had been recommending 8600 PE Novemeber…Here’s a snap short of previous few posts…
Strategy from 16th October: Recommended 8600 Puts for Safe traders
Strategy from 29th September: Recommended 8600 Puts for Safe traders
Strategy from 14th September : Recommended Sell with lower Targets
Strategy from 26th August: Head and Shoulder anticipated
So am sure those who have followed my previous 4 posts on Nifty in last 2 months, they are into Huge profits as have been continuously recommending 8600 PE longs with tgts of 8550/8300/8150…
Technically, Nifty has entered Corrective Wave 4 of a larger trend and the fall is always with heavy volumes as common traders would think that we have started bearish trend again BUT THATS NOT THE CASE! This fall is purely a short term profit booking before we start WAVE 5 move back in the direction of larger wave. During this course of correction for a medium term time frame, Nifty charts have emerged with a rare corrective pattern of “Multiple Head and Shoulder” on Daily charts. I had already anticipated this pattern on 26th August post but didnt expect it be with a Multiple structure. This pattern is surely a bullish reversal but before that we may see some pull back and nifty would give chance to those who missed my call earlier…“Something is better than Nothing”….
As outlined with Red lines, multiple H&S has got breakout confirmation at neckline 8550 which was also a 100 day SMA making breakout more convincing. But yesterday we have taken a strong support at downside channel support which is intact since last 2 months.. So may be a pull back could be expected until neckline at 8550 as marked with red horizontal! That could be entry point for those who missed out earlier for shorts.
On the downside, target from H&S is at 8100 which is coinciding with other multiple levels of 200 day average and Wave 4 Support. So it makes our target more probable..But to be on safer side we would book profits on shorts near 8250
Book 50% Profits on 8600 PE NOVEMBER ,which would bring down cost of holdings to almost Zero as price has doubled since recommended. Keep a trailing sl of profits at 8650.. On downside cover all shorts near to 8250-8300 Spot levels..
Will get back to you again if 8300 or 8650 is triggered now!!