Om Sri Ganeshaya Namaha

Om  Sri  Ganeshaya  Namaha
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Wednesday, May 20, 2009

Reigning The Nifty - 21st May , 2009

Descending Triangle

Nifty Half Hourly Chart

Nifty Daily Divergence Chart

Nifty Daily Chart

Yesterday was a long legged Doji, clearly reflecting the indecision of traders. Today was an Inside Day showing a lack of conviction by the traders.

An inside day is when a security trades within the high and low range of the previous day. An inside day is a sign to a trader that the security is taking a breather from the primary trend, or is in the early stages of a counter trend move. So we are into the second day of indecisiveness. Only a move above 4509 or below 4167 will set the trend for the coming days.

The Daily charts show that negative divergence is intact inspite of the sharp upmove. Todays open and close was below yesterday's close showing no buying conviction.The half hourly charts magnify today's move for us as a decending triangle. This means the break should be on the downside. A break below today's low of 4244 will find support at yesterday's low of 4167. A break of 4167 will find support at 4103-4126 levels . On the upper side today's high of 4363 and yesterdays high of 4509 are resistances.

I have drawn a parallel channel to the channel in which nifty was trading till the 15th of May, 2009. The upper end of this channel will offer stiff resistance.I have marked the resistance and support levels on this channel.

A point to note is that the broader market was rising as advances outnumbered declines by 3168 shares ! This is seen after a long time.

Happy Trading !!

Lakshmi Ramachandran

1 comment:

ss hari said...

traders accumulated small co shares from innocent small investors.i myself was avictim and puchased prajay engr at very high cost thinking to be a strong share as fii holding was 70 percent.sold the share at great again traders have started the game and by circular trading put the stock in buy freeze.then they sell at just double rate and volumes are also book technical analysis metod is able to forecast the move where it will end.kindly advise some tips on a strategy to deal with such situation.