Om Sri Ganeshaya Namaha

Om  Sri  Ganeshaya  Namaha
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Sunday, June 6, 2010

Reigning The Nifty 7th June , 2010

 Weekly Chart

  • Weekly charts show a higher high and higher low changing the bias to 'up' .
  • Volumes were average and breadth marginally positive.
  • Head and shoulder with neckline at 4650  still valid with target of 7050.
  • Oscillators moving up as anticipated last week from 'turning points'.

Daily Chart

  • Higher high and higher low candle following up on the breakout from the neckline of the inverse head and shoulders.
  • Volumes were average and breadth negative.
  • Oscillators  are moving up showing more upside possible.Obv has moved strongly above it's April 2010 peaks.

Half Hourly Chart

  • Despite positive action the close was within the rising wedge.
  • All emas bullishly aligned.
  • Oscillators showing negative divergence.
    Nifty showed strength after initial hiccups  testing the neckline in classic textbook fashion. The correction since April has toed the line drawn by earlier corrections, by correcting less than 23.6% of the rise from the immediate trough at 4675.Also the number of  points in the fall has been less than the earlier fall falling in line with the earlier corrections.

    As anticipated in the weekly analysis of 31st May, Nifty moved up from the 'turning points' shown on the oscillators. The weekly bias has changed from down to up with a higher low higher high candle. Holding the trendline from November lows is another bullish indication. Time to visit  the Inverse Head and Shoulder pattern formed since June 2008 with it's neckline at 4650. Nifty has tested the neckline  twice since breakout in August 2009. This makes it a very strong support and one can be long for the long term till this neckline is violated.

    Indications of bullishness are resurfacing. In the very short term the rising wedge and negative divergence may lead to a pullback . The fact that world markets are in a tailspin  alert  us to be more biased towards  risk management than earning profits. So trade properly hedged.

    The  bias has turned  positive and one can trade long with a stop loss  of 4950.

    Happy Trading !!
    Lakshmi Ramachandran


    rani patel said...

    Good analysis Lakshmi.

    Unknown said...

    Very good view MS Lakshmi, Keep guiding. KRM

    inception84 said...

    tgt for break of rising wedge pattern on the 30 min chart?

    golfdude said...

    Very interesting maam. I am wondering what you think short term - within a month timeframe. Because world cues are all for a big fall. Could we be going against that ? Maybe we are immune to world markets or are we so oversold recently.

    -- gd

    golfdude said...

    What are the numbers "775", "644" in the daily chart ?


    Lakshmi Ramachandran said...

    thanks rani and k r menon
    golf dude-- short term is around 2-3 weeks. Very short term is immediate trading day. I am analysis only on technicals. The "news" bit we need to keep in mind. that is why the hedging is necessary. The 775 etc is the number of point fall.

    subbu84 the target could test the low of 4786 and lower. Also the inverted cup and handle I couldnt trace. I was refering to the cup and handle at the bottom