Reigning The Nifty - 25th May , 2009

Nifty Monthly Chart

Nifty Monthly Line Chart

Nifty Weekly Chart

Nifty Daily Chart

Nifty Half Hourly Chart

The week gone by was extremely heady and the market players are yet to come to terms with the circuit hits . The huge gap (visible only on the sensex charts ) of 1220 points is still intact and will be a great cushion for the uptrend. I would prefer to lay down a case for both the bullish and bearish scenario and see whether the bulls have more chances of winning or the bears.

Bullish Case

• The gap up area between 12256 and 13380 is not violated.
• The Advance Decline line has been showing a sharp upmove indicating bullishness is not confined only to the blue chips, indicating retail interest.
• Third weekly closing above the 200wema and 50 wema .
• Taken support on channel mid-line (line joining tops of this rally) on daily charts.
• Oscillators on the Daily Charts suggest sideways correction which may lead to resumption of uptrend without much damage to the bullish scenario.
• Sideways consolidation seen on intraday charts in line with the pattern seen in the current upmove. A breakout on upside is seen on half hourly line chart from this pattern.
  

Bearish Case

• We are into the 12th week of continuous uptrend.
• Weekly oscillators are moving into the over bought area.
• Highs made at 4509 did not attract follow-up buying, and the nifty has corrected 42%.
• Negative divergence on daily charts continues.

Conclusion

At this juncture it is easier to point out more bullish points than bearish points. One would be better off being bullish and buy on any dip. Unless 4150 levels are broken, we can see the nifty moving within the upper half of the channel . If the nifty breaks down from the upper half of the channel there is strong support at 3985 and then at 3710.

Happy Trading !

Lakshmi Ramachandran
www.vipreetsafetrading.com