Weekly Chart I
Weekly Charts show a bullish breakout from the trading range of 5 weeks between 5350 and 5492. Volumes were not very high . But then, the volumes have been drying up right through the consolidation since May 2009 ! This range breakout gives a target of around 5630. The oscillators are showing strength by moving up again but yet to move above previous highs, thus still in negative divergence.Macd too is in negative divergence but in buy mode since 9th July 2010.
Weekly Chart II
Weekly Advance Decline Line
Since the rally is now almost a year and a half old , a thorough checkup would be necessary. The volume chart shows increasing volumes on falls and declining on rises.Overall too the entire rise is on falling volumes. The advance decline line too has been constantly falling showing lower and lower participation of stocks in the rise. These two indicators show that all is not well. Increased volumes and participation of more stocks on further increases is desired.
Meanwhile, the daily charts show bullish patterns giving ambitious targets as shown in the daily line chart below.Targets on candle charts may vary by a few points.
Daily Line Chart
In order to keep our feet firm on the ground some bearish pointers.
- Daily oscillators continue in negative divergence and OBV too has joined in after a long time.This is bearish.
- Trendline on Nifty monthly chart joining tops from October 2009 has resistance at 6517. The same trendline on the sensex has the resistance at 18447 which has already been hit.Sensex made a high of 18475 before retracing to close at 18402.
Supports at 5513-5494-5470-5445 Resistance at 5540-5545-5550-5565.
Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com
2 comments:
Madam,
Excellent analysis esp the observation of shrinking volume on the rise and expanding volume on decline in weekly. Also, the observation on Monthy SENSEX is good point.
Madam,I wanyed your views on one stock but dont where to post it? here or on the forum. Anyway , I am posting below. Pl offer your valuable comments:
I seek your views on Canara Bank which I find a fit case for
shorting. My reasons are as below:
1. Negative divergence on RSI on Daily
2. Very fasr rising trendline (BARR pattern)
3. Substantial rise in the price into new highs with small spread on candle accomanied by high volume
4. Likely target 516( first support), 505 (23.6% Fibnocci retracement), 500 (second support line). Regards!!!
-Anoop Kumar
See the answer on the forum and put up any query there. Others who may be trading canara bank could also reply
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