Health check of the Nifty
- Weekly oscillators have weakened further, the Macd getting ready to give a sell.
- Daily oscillators are showing signs of improving after giving a minor positive divergence.
- Intraday oscillators are showing strength after showing positive divergence.
- Weekly moving averages continue to be bullishly aligned.
- Daily moving averages are bullishly aligned excepting the 5 dema which is turning up to move above the 10 & 20 dema.
- Intraday moving averages 5,10,20,50 are bullishly aligned but all of them are below the 200 period moving average.
- Volumes for the week were very low .
- Put Call ratio today was 1.10 indicating oversold markets.
- Advance declines improved through the week.
- OBV has moved up after taking support at lows made when Nifty made a low at 3918 in July 2009.
- The action since May 14 low of 3537 has taken the shape of a rising wedge, which is a bearish pattern. Break down from the wedge could give a 1200 point move. Negating it would require the Nifty to break above the upper trendline of the wedge.
- Head & Shoulders pattern on half hourly charts. Break of neckline at 4350 will give a down move of 300 points.
- An inverse head and shoulder pattern is seen forming with neckline at 4700 .Break out from the pattern could give a 2400 point move up.
- A falling wedge formation on intraday charts from which the Nifty has broken out today giving a move of 350 points.
Intraday and Daily momentum indicators and moving averages are improving. Sentiment indicators are biased towards an upmove-- the breadth improved and selling was on low volumes. Put call ratio is showing oversold condition. The Weekly moving averages are strong and momentum will improve with this recovery in the short term. With the support of 4350 being held for the third time and a breakout from the falling wedge and inverted head and shoulders, bias is towards an upmove until this support is broken.
Happy Trading !!