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Om  Sri  Ganeshaya  Namaha
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Thursday, August 20, 2009

Reigning The Nifty - 21st August, 2009

Half Hourly Chart

Daily Chart Showing falling Wedge

Daily Chart

Today's candle though bullish, was on extremely low volumes. Nifty ended within the tighter range of 4350-4500 since last three trading days, the broader range being 4731-4353. A break from the 4350-4500 range will give a 150 point move. It is difficult to be bearish or bullish within a range as the Nifty gets shuttled between support and resistance.

You can be bearish seeing the head and shoulder pattern and the bearish rising wedge or be bullish seeing the falling wedge. You could feel bullish saying Nifty has held the support of uptrendline from March lows or feel bearish because the retracement is not even 38.2% of the fall from 4731 to 4353.Tricky situation.

Amongst the oscillators , the daily stochastics has given a minor positive divergence and turned up from oversold levels.RSI has not fallen below the 45 level and turned up. The half hourly oscillators are weak and the stochastics has given a sell in the overbought region. Confusing once again.

Be neutral and wait for
  • a break from the range, and be long or short as per breakout
  • a break from the neckline at 4350 (also lower point of range) and be short
  • a break from the falling wedge at 4542 and be long
  • a break from neckline of inverted head and shoulder pattern shown on half hourly charts

Else get whipsawed.

Happy Trading !!

Lakshmi Ramachandran

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