Nifty FMCG index on the verge of an Inverse H&S breakout
The Nifty FMCG index has gained strong momentum in the past two weeks and has surged over 1000 points or 4.5% to 25500 levels. This intermediary rally has led the index to breakout.
Daily chart analysis indicates that Nifty FMCG index is on the verge of an Inverse Head and Shoulder pattern breakout. A close above the 25270 mark will confirm the same. In addition, the index has also surpassed the 100-DMA, 50-DMA as well as the 21-DMA in a single session.
What is an Inverse Head and Shoulder pattern?
An inverse head and shoulders pattern often used to predict the reversal of a current downtrend. Traders usually initiate long position when the price breaches past the resistance of the neckline on closing basis.
Weekly chart analysis indicates that Nifty FMCG index has also created a Double Bottom kind of a formation again indicating signs of the ongoing positive upswing.