A break above the mentioned resistance zone will soon lead the Nifty towards its all-time high. Weight of the evidence still indicates that its bullish stance continues to remain intact.
The Nifty surged ahead in the past two trading sessions, reversing weakness that was seen earlier in the week. The sentiment got a fillip after the Monetary Policy Committee (MPC) retained its neutral policy stance, raising hopes that there would be no more rate hikes in the near future.
The index formed a robust bullish candlestick pattern on the daily chart for the second consecutive day. This move has provoked it to breakout from a larger Symmetrical Triangle pattern on the daily chart. At present, there are no signs of a reversal on the charts. However, there are two important resistance points that the Nifty has to surpass before we see a significant confirmation of the breakout:
1) A close above the 10,820-10,830 zone, and
2) A breach past the Karnataka election verdict day high of 10,930 levels.
A break above the mentioned resistance zone will soon lead the Nifty towards its all-time high. Weight of the evidence still indicates that its bullish stance continues to remain intact.
However, Bank Nifty is the real cause of concern as heavyweights from the private banking space are underperforming while its state-run peers are trying to make up for the lack of leadership, which is proving futile.
Going forward, if there is going to be any weakness in indices, it may be led by the banking space. As far as the midcap space is concerned it is a classic case of failed moves. We observed an inverse Cup and Handle pattern breakdown. However, at the current juncture, the breakdown has failed. And failed moves historically have a tendency of generating fast moves in the opposite direction.
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