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1 January 2018
 |
| BSE (The Total Investment & Insurance Solutions) |
Nifty
shut the first trading session of 2018 near day’s low amid a sharp sell-off in
last hour of trades. Barring the Nifty realty, pharma and media index, all the
other sectoral indices ended with losses. Nifty Auto and Nifty Bank were the
top losers followed by IT and FMCG Index. Even the mid-cap index ended with
losses. However, Nifty small-cap 100 outperformed.
Our daily chart analysis indicates that Nifty has formed a Bearish Engulfing Pattern (BEP). On tracking Nifty behaviour since May 2017, the index has formed a similar kind of bearish engulfing pattern three times.
Following is a table representing the number of points Nifty erased previously after forming a Bearish Engulfing Pattern.
Our daily chart analysis indicates that Nifty has formed a Bearish Engulfing Pattern (BEP). On tracking Nifty behaviour since May 2017, the index has formed a similar kind of bearish engulfing pattern three times.
Following is a table representing the number of points Nifty erased previously after forming a Bearish Engulfing Pattern.
|
Bearish Engulfing pattern formed
|
Nifty level
|
Correction post BEP (pts)
|
|
06
June 2017
|
9709
|
261
|
|
06
August 2017
|
10137
|
452
|
|
07
November 2017
|
10485
|
452
|
|
01
January 2018
|
10537
|
?
|
Although it is too early, but if history would repeat itself then it is likely Nifty may once again erase another 380-400 points in the near term. The tide would turnaround only if Nifty manages to surpass the high of the bearish engulfing pattern, which is at 10,540 levels. The Total Investment & Insurance Solutions
On the downside, there are multiple support zones, 21-DEMA, which is at 10,390 and also its 50-DEMA of 10,290 levelsThe Total Investment & Insurance Solutions
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