NIFTY has created a bear pennant on hourly chart during past three days, setting up a potential short swing trade.
Nifty, while being range bound between 10580 – 11200 since August has created a setup for a short trade with a bear pennant pattern.
On 16th September the market gapped down from recent high at 11084 on the previous trading day. Since then it continued the slide until end of 17th September. On 18th it consolidated in a narrow range, forming a bear pennant pattern. We also notice that the measured moves AB and CD are almost equal, and CD extends to near 10580 which is the bottom of sideways consolidation for NIFTY.
Short entry (Futures)
Short – Below break of the bottom of pennant line, at ~10825 Stop – Above the top of the pennant, at 10885 Target 1 – Little above recent low on daily chart, at 10760 Target 2 – End of measured move CD, at 10600
Trade stands cancelled if NIFTY breaks above the pennant and the pattern setup fails.
The trade is pending and we shall update it once triggered.
Update 1 -
Target 1 was hit.
Move the Stop to break-even i.e. Entry Point at 10820.
Update 2 -
After Corporate Tax cut announcement from the Finance Minister, market rallied today (20th Sept 2019).
Trade Stop set as per Update 1.
Disclaimer – This is not a trading recommendation. Please refer to our full disclaimer text.