Nifty has been sideways over the last few days forming inside bars on the daily charts after the big down day on 31st August.

But if one is to zoom back and see the chart for the last few months we can observe that in the last few weeks while the market has made higher highs, the RSI is not making new highs. Similar thing can be observed in the MACD. So this is a clear case of divergence. What does this mean? This implies that we need to be cautious and follow the price action. A break below 11500 and further 11370 levels can make the bears aggressive and hence a time for bulls to take the back seat.

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