NIFTY higher highs, RSI lower highs

NIFTY Daily Candlestick Technical Analysis

The post-demonetisation rise in NIFTY is baffling.  Most companies and sectors are struggling, some have gone flat tyre, and still the share market is behaving like it is in an overdrive.  What to believe?  I have done detailed analysis and am basing this on a single but dependable old warhorse, the RSI.

On the daily chart, since mid-Jan, we notice that NIFTY is rising but RSI is falling, each NIFTY higher high corresponds with a RSI lower high.  This is not a good sign about the strength of the market.  I would still be cautious to believe in the market rise.

NIFTY Daily Candlestick Technical Analysis

NIFTY Expected Support Points

NIFTY Daily Candlestick Chart Analysis

9000 was an important point for NIFTY as mentioned in the previous post.  At this point, NIFTY could made a gap-down and is currently floating indecisively.

What can we expect at this point?

NIFTY can fall further and the support points are at 8523 and if it doesnt sustain then at 8340.  (Both these points are Fibonacci confluence from the market high and 4 different lows.)

From these points there is a chance NIFTY will revive.  If it falls further we'll identify new support points.

Wait before buying into this swing.