Weekly Negative Divergence
- Follow-up buying on lower volumes than the previous week formed a Bullish candle .
- Maintained within the channel . Support at 4753 and resistance at 5405.
- Negative Divergence and falling volumes on the rise since May 2009 makes the sustainability of the rise, suspect.
- A doji with a long upper shadow was formed but the higher top higher bottom mainatained.
- Volumes increased in the last two days ,both days showed signs of the rise stalling. This calls for caution .
- Third consecutive day the Nifty maintained above the upper channel trendline and above 61.8% retracement levels.
- The 5,10 and 20 ema are bullishly aligned once again.
- Stochastics in oversold area and Rsi14 moving towards it.
Half hourly Chart
- Consolidation/Distribution in an equilateral triangle.
- All oscillators weak after showing negative divergence.
Filling the gap, shown on the sensex, was crucial for further upsides. The gap was filled but sensex could not close above it. Look for a close above friday's high of 17097, above which the recent top of 17790 could be achievable.
Markets have run up fast after building good support at 4950. The trend is up and one should be long. As negative divergences are persisting one should keep stop loss around 5000-5050 levels.Booking profits with pattern targets in mind would be prudent.Please refer to pattern targets in my earlier posts.
Happy Trading !!