Reigning The Nifty - 23rd October, 2009

Third day of a lower low and a decisive break of the uptrendline from March lows. The three day fall has been on increasing volumes every day though marginally. The 5 & 10 dema  are bearishly aligned and Nifty is now below the 20 dema. Amongst the daily oscillators the stochastics has reached the oversold zone . Rsi14 is yet above 50 level and Macd is above zero line in sell mode. Some more selling in store.Next strong support is at 4900-4950.

Daily Chart

 The move from mid August was well channeled and the break gives a target of 4757.

Daily Chart Showing Channel Movement

The intaday charts show supports at 4950-4921. The 161.8% retracement of rise from 4921 is at 4760 coinciding with the channel target .All halfhourly oscillators are in oversold region kindling hopes of a bounce.

Half Hourly Chart

The 200 period ema on half hourly charts , which was a good support since September 2009, has given way and the 5 and 10 ema are in bearish alignment with it.  So "this time it is different" and we may be in for a deeper correction.

The weekly support on the uptrendline from March lows comes at 4983. So be watchful of this level on closing basis.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com