Traders can book profits below 8269 and long term investors must accumulate good stocks on correction...

Since last one and half year Nifty has given almost 78% return. (5118 to 9119). So I am expecting a correction in Nifty, if it breaks 8269. Stock market correction, although painful at the time, are actually a very healthy part of whole mechanism. In last Bull run (2003-07) also, we have seen such corrections. In 2004 & 2006 Nifty had corrected almost 30%. In 2008 we saw a major correction of 60%. But after 2010 we have not seen a major correction. As I have shown in below monthly chart, correction is on the cards. Nifty is making Popgun Pattern on monthly chart and Head and Shoulder pattern on Daily chart.
So be cautious...
                                                                          Nifty Daily

On Daily chart Nifty is making Head and Shoulder pattern. If Nifty breaks 8269, it will confirm the down trend. RSI is also giving negative divergence. So minimum target of this pattern is 7860. It can go down to 7420 also.

                                                                     Monthly Chart

On Monthly chart Nifty is making Pop gun pattern. Popgun pattern is also a trend reversal pattern. And RSI is also in overbought territory. Long term trend line support is also near 7080.

To Conclude, Short term traders should book profits below 8269 and long term investors must use this correction to accumulate good stocks. Traders can go short below 8269 for target of 7860-7420-7080 with a stop above 8850. Happy Trading !!!!