In our Technical Update â€śNifty on its way to the summitâ€ť, dated October 15, 2013 we had stated that Nifty would surpass the previous peak and make an all-time high.
The inverted head and shoulder projections have unfolded as we had anticipated and Nifty has hit our target of 6,580 in five months since our bullish report on the Nifty.
During the process of surpassing previous peaks and hitting all-time highs, the Nifty has given a Multi-Year Ascending Triangle Breakout.
What is an Ascending Triangle Pattern?
An ascending triangle pattern is a bullish chart pattern. In this pattern, one trendline is drawn horizontally at a level that has historically prevented the price from heading higher, while the second trendline connects a series of increasing troughs. Traders enter into long positions when the price of the stock or index breaks above the horizontal trend line resistance.
Since witnessing massive correction in 2008, the Nifty had made failed attempts to breach past the 6,357 mark on two occasions. However, notwithstanding the resistance, the index has finally broken out, and this time it has turned out to be a strong breakout ahead of the critical elections to be held in April 2014.
If the Ascending Triangle Breakout unfolds the way it should, then we expect a minimum upside potential for Nifty of around 620 points which suggests that Nifty would attempt at-least 7,180 in medium term.
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