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Nifty

Post the occurrence of the reversal formation on its daily scale the recovery above the 17450 mark has been with an ease. Occurrence of yet another‘Homing Pigeon’ at the key retracement support is a good sign for a strong trend reversal. The pattern implication would be activated oncetheindextrends around 17630 in the coming days while the swing support at 17040 would now act as a stoploss zone for fresh longs. With both momentumindicators still diverging & witnessing cool off its ideal to expect the price action to remain constrained with the range of 17000-17550 itself for theweek. Seasonality factor score for both 5Yr & 10Yr data remains negative for the month of February & hence the time & price consolidationmodeshould continue throughout the series. A breakout above 17630 from hereon would re-establish the upward directional momentumplay whereleverage longs should be redeployed aggressively. With a reversal pattern on its daily scale well established building fresh longs should beconsideredwith a stop below 17040. Strategy for investors to add longs on a decline with a stop below 16830 remains intact while traders are advisedtodeploylongs with a stop below 17040 & add aggressive positions once above 17630. For the day expect the expiry zone to shapeup around 17550-17600asofnow while BankNifty could witness significant unwinding pressure once it trades above 38800-39000 cluster zone which as of nowremains ahurdleforthe day.

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