nifty analysis for week ended 6th feb,2009

monthly charts


after the "waterfall" fall in october, the nifty has made three months of dojis indicating extreme indecision. the range of november month indicated by the november candle --2502-3240 has been unchallenged till now thus making the two extremes important points of support and resistance. the movements from november onwards has formed a n equilateral triangle with suppots and resistance for this month at 2725 and 3100 , a 400 point range. a breakout on either side should give a move of about 400 points

weekly

since november the nifty has closed in a range of 2678-3078 --400 points. only a decisive close above 3078 will give any upside. nifty must trade above 2880 levels for it to gather further strength. only a close above 3080 will give a hope of bullishness. an equilateral triangle is being formed and the weekly breakout point is 3102 and breakdown level is 2715. since equilateral triangles are consolidation patterns the possibility of a breakdown or breakout cannot be predicted.

daily

i spot the formation of an inversted H&S pattern with neckline at 2895. a breakout will give a target of 3112, which incidentally is the resistance offered by the equilateral triangle. the 50 dema provides resistance at 2905 and the 84 dsma which has been an effective trendline for the downturn offers resistance at 2942

expecting a breakout from the neckline of the head and shoulder pattern, we may take long positions with a strict stop loss of 2750