Nifty Technical Analysis: holding 50-hour EMA

India’s Nifty 50 is trading in the red, but is defending the 50-hour EMA 10,445.

The bullish hammer reversal confirmed on Friday indicates scope for a corrective rally toward 10,700-10,800 in the next few days.

Therefore, I would be a buyer on the dips. The bullish outlook would be invalidated if the index closes today below the downward slopingĀ  5-day EMA.

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Goldman Sachs – Bullish invalidation below 221 levels

Positive RSI divergence + bullish symmetrical triangle breakout signals potential for rally to 245-250 levels. The second quarter revenue has failed to meet expectations…EPS adjusted came-in at $3.95 vs. $3.51 expected.

Better-than-expected EPS is good news. Stay on the long side as long as the prices stay above 221 levels.

Daily chart

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Indecision written all over Dow Jones chart

Weekly chart – Multiple candles with long upper/lower shadows signals indecision at record highs. The rising trend line coming from Feb 2016 low & June 2016 low is seen offering support at 21,310-21,300 levels. If breached, it would signal the index has topped out at least for the short-term.

However, don’t bet on the short side if the index breaches the rising trend line via sideways action…

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