Nifty broke down from a consolidating range but finding support at lower level

On 5th June Nifty ended the week in a consolidation mode but with bearish bias. Although the day started with optimism, from 23500 level came the selling pressure and towards the end of the session that brought down Nifty to close 23366. The MHAF chart confirmed this view with the formation of a red candle with upper wick but not too strong. However, on 8th June the same view was confirmed with a gap down opening in Nifty with 290 points. Interestingly, this immense bearish pressure started fading right from the beginning and as of this wring Nifty is steadily climbing up from the opening level. So far Nifty is down only 140 points for the day meaning already recovered 150 points from the opening gap down level. This still does not confirm a strong bullish move because the MHAF chart still in the process of forming a strong bearish candle.

As per the spreadsheet below, the current bearish bias will be over if Nifty reaches 23575 today or near 23400 tomorrow. If that happens tomorrow then a new bullish trigger will appear above 23506.

We have our short position intact with moderate gains happening with every passing day. Our reversal point to a bullish position will come only if Nifty reaches 24005 in this monthly series which right now has only a 20% probability. We have an unrealized profit of Rs 72000 right now so if Nifty consolidates again at this lower level for another 1-2 weeks, we will achieve the 80% profit target by then.

Cheers and happy trading.