On the 25th of May, we discussed the possiblillity of the Nifty coming within a symmetrical triangular pattern. As assumed the Nifty did touch a low of 5328.7 yesterday and rebounded back to close on at 5348.95
As I write Nifty today has rebounded and has been trading @5398 at 1137 AM.
The common rule requires 2 major confirmations before the assumption of a symmetrical triangle.
1. The second high should be lower than the first high with the upper line sloping down.
2. The second low should be higher than the first low and the lower line should slope up.
The pattern generally forms with 6 points before a break out occurs.
Drawing major trendlines our upper limit before a down trend begins would be 5660-5690 . A short position could be assumed with a stop loss of 5750
With an Elliott Wave Outlook the rally from 5177 (WAVE C) was described as an ‘X’ wave separating two sets of three-wave down moves. We should now definitely try to hold 5600-5650 as a safe haven and exit positions on every recovery to sell before a move down to 4800
