Reigning The Nifty - 20th July,2009

Half Hourly Chart

Daily Charts

Weekly Chart showing Falling Wedge

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 the neck firm once again ?

Oscillators

• Weekly Oscillators moved down from overbought levels but just that much to show the downmove as a corrective move.

• Daily Oscillators are bullish with the RSI14 and Macd having taken support at levels held since November 2008, and the Macd giving a buy once again. The stochastics has reached overbought levels but going strong.The oscillators have crossed their earlier peaks showing way to the Nifty to do the same.
• Intraday half hourly oscillators have shown mild bearish divergences.
  

Moving Averages

• Weekly Long and Short term moving averages bullishly aligned.
• All moving averages are bullishly aligned excepting the 10 and 20 demas which however are moving up and are also bullishly aligned with the 50 dema.
• Bullish alignment of moving averages on half hourly charts.
  

Bearish Price Pattern

• The Nifty has moved decisively above the bearish Head and Shoulder pattern indicating a flase 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 (I had shown it as a flag formation on weekly charts on the 13th July post).
• Falling wedge on half hourly charts.
  

Sentiment Indicators

• Advance Declines improved considerably all of last week.
• Put Call ratios is at 1.16 indicating market is overly bearish.
  

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.

Raise the stop losses as per your risk profile in case markets rise as per the targets.


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.


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com