Hot Stocks | Bharti Airtel, Britannia, JK Cement three buy calls for the short term

For the last four sessions, Nifty has been moving in a narrow range. During this consolidation, Nifty formed a descending triangle on the hourly chart, which indicates the breakout above 10,350 and breakdown below 10,220.

On June 24, Nifty found resistance around 10,550, reversed south and formed bearish engulfing pattern on the daily charts.

This bearish pattern would be negated once the high of that candle is taken out.

A level of 10,550 in Nifty also happens to be 61.8 percent retracement of the entire fall, seen from 12,430 to 7,511.

Looking at the historical bear markets of 1992, 2000 and 2008 in India, we find benchmark indices never retraced more than 61 percent of the first major down move.

This time also Nifty has been finding resistance at 61.8 percent retracement of the fall seen from 12,430.

So, to negate the possibility of resumption of a major downtrend, Indian Markets has to surpass 61.8 percent retracements placed at 10,550 on a sustainable basis.

Nifty has been trading in the rising wedge pattern on the daily charts. The lower band of this wedge projects the strong support at 10,050-10,100 levels. Close below this support, would mean breakdown for the short to medium term in Nifty.