Outlook for NIFTY for the coming trading sessions

In our last post on Nifty outlook,we expected downside targets of 5975 and 5900 for Nifty.Nifty however staged sharp pullback on the back of considerable short covering and closed at 6177 for the week.

Nifty-Triangle Pattern Breakout

On daily chart,Nifty has given breakout (blue circle) above a Triangle chart pattern which is a bullish sign for Nifty in the short-term period.

In the process, the index also closed above 20 Day Simple Moving Average.The short-term indicators ; stochastics and TRIX have also come into buy mode (see green circles in figure 3 ).

Bollinger Bands

The target for this Triangle Pattern breakout comes at near 6300 levels on the Nifty.Another indicator ,Bollinger Band (figure 2) also shows that Nifty may bounce towards upper channel which corresponds to 6300 level on Nifty.

Stochastics & TRIX

Foreign Institutional Investors (FII's) have started buying in the markets after an initial brief bout of selling.Last trading sessions derivatives data from NSE states Index Futures buying of Rs.546 crore.

In coming days,we expect Nifty moving higher towards 6220 and 6300 levels.Hence,we can go long in Nifty near 6080-6090 levels for target of 6220 and 6300 with a stoploss at 5970(spot level).