Anticipation of Reversal

Amidst Greek crisis, market remained in Bears control for the whole week. Almost every indices sagged and Sensex shaded 4.5% while Nifty 4.9%. But ,if we believe on technicals, nifty and bank nifty is all set to bounce back. So we are on the verge of witnessing yet another reversal

As clear from the picture above that on 7th May , 2010 Nifty has formed a Doji, that too after a gap down. And Doji after a downtrend is a harbinger of reversal.

And if we plot Bollinger Band on Nifty May future, it supports our claim of reversal since the Doji is not only formed on lower band but its lower half remains outside the lower band. One more thing is apparent from second picture, that is last four candles have been in touch with lower band as well. This is not a common event, it happens when a unusual event affects the price movement of an equity or index and the price movement deviates from its normal course.