Tuesday, June 16, 2009
Reigning The Nifty - 17th , 2009
The RSI 14 has broken the low made on 9th June. As momentum action precedes price action we may expect 4507 to break tomorrow. Let us see whether the low of 9th June at 4365 holds or gives way.
Well, even the panic low in the morning did not break 4365. In fact, like I thought," Very minor positive divergences are seen on half hourly charts. We may get a minor bounce before continuing the correction.The fall has been sharp so we may get either a bounce or sideways movement after hitting 4450 levels", we had a bounce after making a early morning low of 4406.
However inspite of the bounce , the short term seems to be weak. The stochastics on daily charts has broken it's 9th June lows which is 4365 on the Nifty. The Nifty still trades below the midline of the channel we have been moving in since 2539. This trendline is now resistance at 4642 .On half hourly charts the lower trendline of rising wedge is proving strong resistance.
The silver lining in the cloud is that we have closed above the 38.2% of the fall till 4406. Also the rising wedge on daily time frame is still not broken. Closing below 4538 tomorrow will violate the rising wedge.
The lower trendline of the channel has support at 4255 for tomorrow.
Happy Trading !!