Crash Boom Bang! Going Went Gone! 4050 the sink or swim line, the triple support, caved in like thin ice. As for me I just feel like giving up TA and trade by tossing coins; heads I go long tails I go short! Another lesson in humility meted out by the market. PRICE is the FORCE! Yesterday’s Doji was in anticipation of today’s Inflation numbers, IIP numbers and Infosys results. The Inflation numbers failed to spook us but IIP did us in. Yesterday also we had attempted to break out of 4185/90 range unsuccessfully. Today in spite of a firm opening, we yet again failed to conquer that level and armed with the weak IIP numbers, triggered a vicious fall. I was really hoping that 4050 will hold but after initial struggle that also gave in. The solace; we seemed to have closed in its vicinity. The ugly; it took out lot of stops for longs. The 5 minute chart above shows a nice waterfall decline. The hourly on the left has now become a cause of concern. It Bears (pun intended) an uncanny resemblance to the flag we’ve had earlier (see both the shaded areas). A break of the trend line suggests a fall of 250 points. And to paint a real ugly picture if this pattern unfolds the way it is supposed to then technical target is approx 3400. But I suggest we cross that bridge when we come to it. On the daily chart shown below, one can see how beautifully we reacted to the falling 20 periods EMA. In my opinion we are back to sitting on the fence scenario. I wouldn’t short till we break 3990 convincingly and wouldn’t like to go long till we close above 4050 on EOD.
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