Nifty: Support 4400 – 4585 - 4660 Pivot 4777 Resistance 4850 - 4965 - 5160
Nifty: The head-and-shoulders pattern is one of the most popular and reliable chart patterns in technical analysis. And as one might imagine from the name, the pattern looks like a head with two shoulders. Head and shoulders is a reversal pattern that, when formed, signals the security is likely to move against the previous trend. There are two versions of the head-and-shoulders pattern. The head-and-shoulders top is a signal that a security's price is set to fall, once the pattern is complete, and is usually formed at the peak of an upward trend. The second version, the head-and-shoulders bottom (also known as inverse head and shoulders), signals that a security's price is set to rise and usually forms during a downward trend. Looking at the chart of Nifty it has started its rally from 2525 and after testing the higher level of 5300 short correction was seen forming the left shoulder and tested the support of 4700 level. There after the rise which was seen crossed the higher level of 5300 and move further upside where 6330 were tested. There after reversal for the higher level again it has taken support at 4730 level and formed a neck line where shot bounce which was expected has been seen and tested the higher level of 5400 level. Further we are looking the formation of the Right Shoulder where short term top is expected to be posted and will move to test the Neck Line which comes at 4730 level and once this support of 4730 and sustain trading below 4700 will confirm the down trend where its next down side target will be the previous bottom of 2600 around. If we look at the Fibonacci Expansion of point a-b from point c which comes to 3700 which is 161.8% and 2660 comes to 261.8% level will be the immediate target where it may get halt for some time before the next round of selling which may be seen after short bounce. We are on the over view where the lower side bottom may be seen at 2600 with + - of 200 points. Stochastic are trading in mid zone and is moving towards the lower level and is expected to sustain in oversold zone where further fall in price may be expected.
