Half Hourly Chart
Though technically the upmove is intact signs of caution are appearing on the charts.
- The latest action on Nifty from end of August 2009 has formed a rising wedge, shown in red, visible on both the Daily and Half hourly Charts. Rising wedges are bearish patterns.
- The negative divergences in the daily and intraday oscillators , which are still intact , seem to be supporting the bearishness of the rising wedge.
- The rise in price has come on falling volumes.
- The Nifty has made a lower high and lower low on the last trading day.
The lower trendline of the wedge supports at 4935.
This is just a caution and on must wait for more evidence to go short on the Nifty. Till now the Nifty has poo-poohed bearish patterns and this time may be no different as the Nifty has broken out of the flag shown on the half hourly charts.Resistance is at 5003-5009-5026.
My strategy would be to go long on any dip so long as the uptrendline from March lows is not violated and book profits when you are in profit as the runup has been continuing for longer than one can be comfortable about. Remember : The trend is your friend and at the moment the trend is UP.
Happy Trading !!