Action:
The chart above is of IFN(india fund) which is supposed to track the indian sensex. I often use this since, it gives me volume information, while the sensex doesn't (at least on stockcharts).
As we see, this chart had a nice bearish Head n shoulders pattern which broke the uptrend the chart was in since march, and the sell off ensued. The chart is now at a double bottom. The question is will this hold?
Guess:
My guess is on monday morning (June 23rd), the sensex gaps down, pulling a lot of shorts on board, leading amateurs to think the market has broken resistance and pulling them on the short side. Another reason why I believe the sensex is due for a bounce, is there was a huge intraday buying volume on the IFN on friday. The stochs are oversold on the hourly. Finally, whenever you have long fully coloured bearish looking candles, with a close at the lows of the day, it is often a signal for a bounce. finally, there is a small MACD divergence, which is usually bullish. Trading is all about probabilities. The time for shorting the sensex was when the HnS formed. I'd rather be long than short here. Lets see.
2 comments:
Hi...
The IFN seems to have broken the double bottom convincingly..whats your view now??
Yes sadly the double bottom did not hold. I dumped IFN near 39. The breakdown of the HnS can take the IFN to the 33-34 region, where it can find some support.
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