Posted By : Kishore B.S
Hi Friends !!!!
The markets bounced back yesterday after the initial GAP down opening recovering all the losses made during the start of the session and ending in the positive zone.
The most important factor is that the 4760 level has been honoured with the support level of 4800, yet again, proving to be the saving grace for the faltering Indices which has been in the downtrend from the start of last month when the indices fell from the 5280 levels.
With yesterdays close much above the support level of 4800, the charts are indicating the likelihood of a Double Bottom formation at 4770 levels which would be healthy and significant if held for another 2-3 sessions. The target for the pattern formation would likely be 5200-5480 unless the pattern is broken down.
Most of the Indicators are also showing signs of bottoming out and some bounce back in the following sessions which support the pattern and hence needs to be watched with attention.
The pattern would be further confirmed if the Indices were to cross and close above the 4910 mark which would clearly indicate the pattern and give the target as mentioned above.
On the lower side, as has been reiterated from the last few session the 4760-4800 levels are important pivotal points to be watched, which if broken could likely give a bearish pattern of FLAG with likely target of 4660-4580, but if the Indices does not break the lower side this week, then the pattern would be negated and same would be the case for the upper pattern as well.
(Inputs Mr. Hemanth .V, Faculty TA, Stock Market Institute, Bangalore)