October 27, 2014

Markets form "dark cloud cover"

Markets form a "dark cloud cover" or "piercing bar pattern". This happens when we have a nice gapup opening followed by a selloff which closes within the range of the previous day's candlestick.

Because of above, preferred strategy on EOD charts is to do nothing and let markets give some clear direction. As of now, I expect markets to be directionless between 7800 and 8200.
So we had a nice gapup opening above 8000 but eventually markets sold off and we had a close below 8000. This has bearish implications and can lead to further weakness.

EOD charts - Note strong resistance at 8200 levels.

Intraday charts

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