Wednesday, May 13, 2009
Reigning The Nifty --14th May, 2009
A Harami is a two day pattern. Immediately preceding the harami candle, there should be a large, real body clear candle. When this candle occurs, the bulls appear to be fully in the driver's seat.The next day, however, a small real body candle appears within the larger real body. This is the harami candle. The reversal signal is more potent if it is the opposite color, as this color change shows that the advance has stalled. The bears are now on strong ground and are engaged in a struggle for power with the bulls. The upper and lower shadows can be of any size, and could even go above the real body of the clear candle day.
The next day's candle -- the one that follows the harami candle is important. Sometimes harami merely signifies that the stock is entering a period of consolidation . If, however, the Nifty plummets the day after the harami candle takes place, then there is an increased likelihood that a Minor top may be in place.Let us see whether this bearish signal works its way to a breakdown.
The Daily oscillators are weak showing negative divergences and in sell mode.
Congestion zone of 3534-3717 continues with volatile intra day moves. In the ongoing rally we have seen trading ranges after sharp upmoves and then a breakout from the range to make new highs. I have marked these ranges on the daily charts . We have yet to see if this range too is going to give us a new high or break down . Break any which way would give a move of 183 points (3717-3534=183).
The rising channel support for tomorrow on the daily charts is at 3603. Other supports and resistances are marked on the half hourly chart.
Happy Trading !!