NIFTY TECHNICAL ANALYSIS
Since around a week Market is in an indecisive mode, thanks to budget 2009. If we consider the up move starting from 23rd June low of 4160 to the high of 4440 on 29th June, the move was bumpy and volumes were decreasing while price is moving up, saying out loud that it is a retracement. And the fall after that was with high volumes. But later on Nifty started swinging in a 100 points range with higher volumes. Here one important point to note is the green bar volumes are higher, means that market is trying to push the prices up, but was unable to succeed. On Friday Nifty broke this Resistance level of 4360 with good volumes. On the overall this move is still indicating the weakness until it breaks 4440/4450 levels decisively.
On the higher side Nifty still got resistance at 4440/4450 levels, above which it can move up to 4500 levels, which is target for the Expanding Triangle. Here one point to be noted is Expanding triangle resistance is broken with good volumes and the spread of the bar is very good but with out a partial retracement, which indicates a possible
pullback ahead.
On the lower side now 4360 levels may give good support, below which it may take support from 4270 levels which is the trend line support. Nifty may see weakness below 4240 levels
If the gap at 4050 is breached, the downtrend in Nifty will continue towards 3800. On the other hand as long as the support at 4050 holds, Nifty is likely to trade in a choppy manner between 4050 and 4175,” said the technical report
Reigning The Nifty - Magnified Action-20th July,2009
Spotted a rising wedge on the up move from 3918 which is bearish if breaks down.
Sorry for adding to the confusion but my strategy remains the same i,e. Long with stop loss of 4200 or break of the rising wedge decisively.
Daily Charts
Weekly
The market undermined Nifty's capacity since the neck was broken. Nifty was stronger than expected and managed to run up and repair most of the damage.
Is the neck firm once again?
Moving Averages
- Weekly Long and Short term moving averages bullishly aligned.
- All moving averages are bullishly aligned excepting the 3 and 8 which however are moving up and are also bullishly aligned with the 55 EMA.
The Nifty has moved decisively above the bearish Head and Shoulder pattern indicating a false breakout below neckline. Moving above 4693 which is the head, will nullify the bearishness of this pattern.
Bullish Price Pattern
- Breakout from flag formation on weekly charts indicating fall from 4693 was consolidation.
- Falling wedge formed on weekly charts which is bullish.
- Downward sloping channel breakout on daily charts
- Falling wedge on half hourly charts.
Sentiment Indicators
We are once again in the perplexed state whether markets will move up or down. This is the reason we follow price with stop losses instead of making these difficult predictions about the future. Remain long with a stop loss of 4200 for targets of
- 4402 61.8% retracement of fall till 3918
- 4480 previous top
- 4590 falling wedge target --shown on half hourly chart
- 4693 top of rise from 2539
- 4812 channel target shown on daily charts.
I would prefer to be light in my positions and wait for breakout from the top of 4693 or from the falling wedge on weekly charts to get 100% bullish, and look for a break of the neckline once again to be bearish.
Half Hourly Charts
Nifty's neck remained untouched. Daily momentum seems to be supporting an up move . A falling wedge is spotted supporting an upside. So long as Nifty's neck remains intact, we can expect a breakout of the falling wedge, opening up possibilities of more upside.
Half Hourly Chart
Daily Chart
The Nifty broke out of the falling wedge giving us the anticipated pullback. Yesterday's hammer proved bullish and was confirmed by today's huge white candle. Advance Declines improved considerably but volumes were not very impressive.
- Moving averages are all bullishly aligned once again except the 21 and 55 period. However all the moving averages are above the 200 EMA
- Oscillators are looking strong and reaching overbought levels.
Daily Charts
- Bullish candle confirming hammer pattern.
- Stochastics in buy mode from oversold region. RSI 60 so there is lot of scope for up trend
- Macd positive crossover in positive zone.
- Moving in a downward sloping channel, a breakout from which would be very bullish.
- 3, 8 & 55 EMA positive crossover
- 4190-4212 will be very strong resistance where we have the neckline and the 38.2% retracement level of fall till 3916.
· Moving averages are bullish.
The view from above analysis would be that this is a pull back till we have more evidence of bullishness.
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