Although many people are bullsih seeing the impressive upmove of Indian Stock Markets, I have some different view. The Hourly Chart shows a Downtrend Line and an Uptrend Line (which was breached decisively on 1st Dec and also the 200 Period SMA is coincidentally nearby.
- This uptrend line (and the accompanied rise) resembles more to a bearish rising wedge / channel , than a genuine, sustainable up move. In my previous post on Dec 1st, I expected resistance then and advised to initiate a short at near 2890, which was not reached. Considering Nifty Future has broken the rising wedge support (uptrend line), now that line should act as resistance.
- The two lines converge at about 2819 which should be big resistance now. So, bulls need to take this level with full force to counter bears and then try to conquer 2920 which is not very easy.
- The slow stochastic oscillator also signals a short term top, however, I still maintain my view that oscillators should not be given high importance in trending markets.