In my last post about Indian markets I mentioned about Nifty's trading range of 5400-5800. I am glad that I was right on lower end and slightly wrong on upper end of the range. Now it seems Nifty is hanging in between 5400-5900, a 500 points trading zone.
After rapid rise from 5400 to 5900 in a very short period, Nifty was expected to see some consolidation/profit booking. After unsuccessful try of breaking above 5900, Nifty witnessed some selling pressure and looks like it found support at 21 DMA/previous support of 5700.
In above chart, it looks like Nifty (or markets) is/are in a Symmetrical triangle, where in tops are topping out and bottoms are bottoming out indicating for a possible narrow range for immediate time frame and final breakout/breakdown after that.
Compared to other two triangle formations (Ascending and Descending), Symmetrical triangle(for more information on triangles, click here) is not a directional indicator, because it can be broken on either side. On higher side, if Nifty crosses 5900/5950 stays above for couple of days then the possible breakout is possible and on lower side as long as Nifty holds 5700 and 5600 levels, it is safe to maintain our longs.
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