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Sunday, February 21, 2010

Reigning The Nifty - 22nd February, 2010

 Weekly Chart

Daily Chart

Daily Chart II

Half Hourly Chart


Weekly Chart
  • A doji on the weekly within the channel. The "inside day" pattern continued for the second week leading to a sideways movement.
  • The lower trendline of the above mentioned channel has been adjusted to accomodate more lows which has made the lower and upper trendline perfectly parallel .
  • Support on this channel for coming week is at 4728. 
  • A close below this will give a move of 700 points, and staying within the channel will open up possibilities of testing the upper trendline of the channel for targets above 5310.
  • Stochastics has given a buy in the oversold region and Rsi14 has moved just above the 50 line.
Daily Chart
  • Broke down from the "Inside Day" pattern  to form a lower high and lower low.
  • Broke below the uptrendline from the low of 4675 which is bearish.
  • Nifty has made a double top around the 4930-4950 level.
  • OBV has moved below the low made on 10th Feb indicating probability of test of those levels of 4750.
  • Formation of a falling wedge and a probable inverse head and shoulder pattern both of which are bullish patterns. 

Nifty has been in a sideways move since the low of 4675. Break of the uptrendline from 4675 and inability to scale previous high of 4951 shows weakness. A break of the low of 4675 may lead to a test of the medium term low of 4538.

On the other hand bullish patterns are forming on the daily charts , shown in Daily Chart II. Watch for breakouts from these patterns.Weekly charts too show the Nifty moving within the channel shown on the chart. This may lead to test of the upper trendline of the channel.

Trading longs with proper hedge and a stop of a daily close below 4700 would be the strategy.

Happy Trading !!

Lakshmi Ramachandran

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