Reigning The Nifty - 29th June, 2009

Half Hourly

Daily

Weekly

" The stochastics is trending up sharply from oversold levels indicating that prices are no longer closing near the lower range and a reversal is on the way."
The Nifty zoomed 133 points to substantiate my view.


Weekly

• The weekly support of 4250 held and thus the uptrendline is unviolated.
• Oscillators though overbought are not showing weakness.
• The Golden Cross of 20-50-200 is intact.
• This week's candle clearly shows support at lower levels.
• Second consecutive week of lower bottom lower top.
• Support on uptrendline is at 4360 for the week.

View : Cautiously optimistic

Daily

• Nifty once again moved back above the uptrendline and the 5,10 & 20 demas.
• Stochastic which clearly indicated an upmove in the offing is looking strong.
  
• RSI14 has bullishly moved above the 50 line after only briefly moving below it.
• Correction was restricted to 23.6% levels of entire rise which is very bullish.
• Retraced more than 40% of the fall from 4693-4143 .
• Potential Head & Shoulders pattern spotted and we have to be watchful as this move may be the right shoulder.
  

View: moderately positive

Intra Day

• Moved above uptrendline.
• Oscillators are once again in the overbought region but still going strong.
• An inverted head and shoulders formation spotted having a target of 4540.
• The shorter term averages are once again bullishly aligned but are yet to align themselevs from the bearish stupor with the longer term averages.

View : moderately positive

My view

It is the action seen during countertrend moves that says the most about the health of the overall trend. Was the fall from 4693 a countertrend move to the rise from 2539? Or is the upmove from 4143 a countertrend move to the fall from 4693? We gauge both scenarios.

We have just had the biggest fall --fast and furious as someone put it--in this uptrend and this a negative.

We will be watchful of the just begun upmove to gauge whether it is continuing trend or corrective of the recent fall. We will continue this analysis daily so we remain on our toes.

• First mark is negative as volumes were not very impressive.
• Second mark is positive as advance decline improved , though just a wee bit.
  

Short term trend is now mildly positive with price above short as well as long term averages on daily charts. Intermediate term is bullish but overbought so one needs to be wary of any sudden change in sentiment which may cause the trend to change. However one needs to trade and the sensible thing to do would be to trade the short term when it is in sync with the intermediate trend which is up. So one can be long for a target of 4538 with a strict stop at 4150-4200.

Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com