On the Daily chart of the Nifty50, we see this broadening top formation, a.k.a. a trumpet, which is usually one of the most reliable technical patterns. The problem is that it is a bearish pattern, for it is only found as a top formation. We also see the formation of five waves inside the pattern, as it should be. On top of that, the RSI is extremely overbought, and the MACD also very high, with the MACD fast line turning down towards the trigger line as well.
In my view, this is just a confirmation of the bigger problem this index has, i.e. the bearish rising wedge on the Weekly chart I have already detailed here a few months ago. Also in my opinion, the rising bearish wedge is THE most dangerous pattern to be found, and the only thing this action of the last couple of months has accomplished, was to provide a textbook overthrow at the end of the wedge.
Always keep in mind that this Weekly pattern is on a longer time frame. The first of the five waves in the wedge started in March 2020, more than 3½ years ago. Therefor a few months are of no consequence, and in my view it is now a matter of applying patience before seeing this pattern playing out. Both these patterns will, of course, play out to the downside.
In my view, this is just a confirmation of the bigger problem this index has, i.e. the bearish rising wedge on the Weekly chart I have already detailed here a few months ago. Also in my opinion, the rising bearish wedge is THE most dangerous pattern to be found, and the only thing this action of the last couple of months has accomplished, was to provide a textbook overthrow at the end of the wedge.
Always keep in mind that this Weekly pattern is on a longer time frame. The first of the five waves in the wedge started in March 2020, more than 3½ years ago. Therefor a few months are of no consequence, and in my view it is now a matter of applying patience before seeing this pattern playing out. Both these patterns will, of course, play out to the downside.