Markets break the lower trendline and force me to discard my "triangle" view.
The reason is for a valid triangle, one must have at least 5 equi-spaced contact points - 2 on one trendline and 3 on the other one. That is not the case this time. At best we can just assume there is a break of the lower trendline.
The triangle view may still be valid only if markets bounce from current levels, rally to 7400 levels (or slightly more) and then correct all the way down.
The broader trend is still up with support at 7100s levels. If this breaks, it will mean an exit from nifty longs. Short positions will however not be created immediately as it will require formation and break of a lower swing low.
NOTE:
- VIX dropped 4% meaning there was no fear in the market
- Advance decline was mildly negative.
- So this might look like selling in index stocks.
The reason is for a valid triangle, one must have at least 5 equi-spaced contact points - 2 on one trendline and 3 on the other one. That is not the case this time. At best we can just assume there is a break of the lower trendline.
The triangle view may still be valid only if markets bounce from current levels, rally to 7400 levels (or slightly more) and then correct all the way down.
The broader trend is still up with support at 7100s levels. If this breaks, it will mean an exit from nifty longs. Short positions will however not be created immediately as it will require formation and break of a lower swing low.
- VIX dropped 4% meaning there was no fear in the market
- Advance decline was mildly negative.
- So this might look like selling in index stocks.
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