India’s SENSEX Index (SENSEX) appears to have completed its Head & Shoulders pattern following yesterday close below its neckline support of 26,423.
It is too early to call for the confirmation of the breakdown of the H&S pattern but the bulls would have to pay attention to price movements in the coming days.
Yesterday’s bearish engulfing pattern could bring about an acceleration in selling pressure in the coming days.
The next key support is seen around the 25,540-25,570 levels. Breaking that support would likely signal that a longer term correction that could last for months is underway, with the H&S target of 22,822 being the first target.
Lower prices are possible as well. This bearish view holds as long as prices remain below 28,071.
Above the said resistance could see prices hit new highs for the year.
As of now, the odds would favour the bears at the moment but keep an eye on prices movements in the coming days as it would further determine which way the markets would move next. (Read Report)