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Tuesday, August 18, 2009

Reigning The Nifty - 19th August 2009

Daily Chart Showing Falling Wedge

Daily Line Chart

Half Hourly Chart

Daily Chart Showing OBV

Daily Chart

Intraday oscillators were oversold and I expected a short term support which came in the very first few minutes of trade at 4372.
  • The upmove today lacked momentum and was very much a reaction to the previous day's fall.
  • On Balance Volume, which measures negative and positive volume flow, has moved lower than the Nifty, having already reached levels it had reached on 13th July when the Nifty made a bottom at 3918. This indicates that Nifty could follow and move lower. This follows the technical analysis concept that volume precedes price.
  • Daily Oscillators are weak but not reached oversold levels indicating the Nifty could move lower.
  • Half hourly oscillators, barring the stochastics, have moved up from oversold levels but not reached overbought levels. Stochastics has turned up agin after giveng a sell from overbought region. So there are chances of some more upmove.
  • The 5dema is below the 10 dema and 20 dema indicating short term bearishness.
Advance decline line has shown a minor positive divergence. The daily line chart shows that on a closing price basis the Nifty has moved above the uptrendline from March lows once again. Maintaining a close above 4433 for tomorrow will keep the price above the uptrendlne.On half hourly charts neckline (pink) support is at 4352 and the green neckline support is at 4321-4312. The 50 dema offers support at 4365. The falling wedge shown on daily charts has support at 4325 .

Though most indicators are indicating a weak Nifty, Nifty is near strong multiple supports around the 4325 levels. Trade shorts with strict stop losses.

Happy Trading !!

Lakshmi Ramachandran