Saturday, June 13, 2009
Reigning The Nifty - 15th June , 2009
Golden Cross of 20, 50 and 200 weekly moving averages. This makes the weekly/intermediate scenario very bullish. Point to be noted is that the Golden cross of all three moving averages have come in the same week dues to the sharp rise in the Nifty. This has never happened before.
A long legged doji was formed indicating indecision. Doji on weekly charts needs to be taken seriously, especially since the momentum indicators are overbought and the doji was formed at significant resistance. A correction which is long overdue, may have begun. Though my reading is this correction may not be easy for the bears. We may be in for a lot of volatility.
The rising wedge and "Inside Day" pattern high and low levels have not been violated. Oscillators are in negative divergence. The rising wedge has support at 4484 which coincides with the 4500 at which level a good amount of puts have been written. If this level does not hold then we could go to 4350-4200 levels. Levels are marked on the charts.
The rising wedge on the line charts though, has been broken.Watch the earlier low 4430 on these charts for further weakness to 4092 .
Half hourly Charts
We will talk here only of the recent action as rising wedge has been discussed on daily time frame.
Since last 3 days the Nifty has not been able to scale the 4689-4693 levels. It has proved strong resistance attracting profit booking rather than follow-up buying. The blue short term trendlines depict this.Lower trendline sloping downwards with lower lows and upper trendline flat.
If 4551 is held then we can expect retest of 4693, else a retest of 4365.
Fibonacci supports and trendline supports are marked on the charts.
Resistances are 4645 - 4693 -4770.
Questions asked are, "is it still a buy at dips?" Yes, because the intermediate trend is still bullish. We would need to see a lower low established before changing our view of the intermediate uptrend signficantly.
Happy Trading !!