Posted By : Kishore B.S
Hi Friends !!!!!
The markets sank yesterday after the RBI announcement keeping the rates unchanged, when larger section of the Economy was pinning hopes of Rate cut alongwith the FM also vouching for it. The RBI announcement was followed by the increase in CPI for the month of May and also the Fitch agency downgrading of India to Negative from the Stable outlook on lack of reforms and Policies.
The double resulted in the sensex shedding 270 points and nifty shedding nearly 80 points by the close of the day. However on the silver lining side the charts of the FLAG pattern have not been broken down and the pattern seems very much intact and the current trend seems to be strong consolidation happening before the big event the target could be 5380 if the pattern is confirmed.
After the initial opening yesterday it almost looked like the pattern was confirmed however the failure of the Indices to crossover the 5190 mark sounded alarms of false breakout and cautiousness to be exerted which proved to be handy and of great help. Now the Indices are back in the trading range between 5000-5160 and the unless the range bound trading persists trading is likely to bear no fruits and it would be best to trade low and keep booking profits as and when adequate.
(Inputs Mr. Hemanth .V, Faculty TA, Stock Market Institute, Bangalore)