BANKNIFTY, October 27, 2023

Ascending Channel Pattern Detected: Bullish Breakout Expected?


Yesterday's descending channel pattern continued, and market sentiment aligned with it, resulting in further downside.

The bulls attempted to form an ascending channel pattern towards the end of the expiry. An ascending channel can identify an uptrend on a longer-term chart or a potential continuation of a downtrend on a shorter-term chart. A breakout below the lower bound of the channel often signals that prices will continue to move lower in the near term.

Given today's global market sentiment, especially the Dow Jones and Nasdaq, there is a low probability of a significant upswing in the Indian market. If the channel pattern breaks down and support is breached, we can expect a further decline.

I have adjusted the new support and resistance levels. As market sentiment is contradictory, it would be prudent to wait for a breakout before taking a directional position.

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