Reigning The Nifty - 31st August, 2010

 Daily Chart

Nifty formed a doji with a long upper shadow as higher levels due to global cues got sold into. The close though positive was towards the low of the day. Breadth continues to be negative , taking the advance decline line to greater lows.Volumes were not impressive.Daily stochastics remains in the oversold range showing that prices are trending down.The pink neckline held well today and has support at 5394.50. The 50 dema has support at 5387.


The sensex has formed an inside day with friday's candle range being 18248 - 17944.One could look for direction tomorrow on the basis of this range.

Supports and Resistance marked on the chart.



Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty 30th August, 2010

 Weekly Chart

Weekly Chart II

Last weeks warning of  "All is not well" may have helped readers to take the right steps to book profits and or cut losses. The breakout witnessed last week from the 5350-5492 proved false. The resistance from the trendline joining January  and April 2010 proved strong and the Nifty corrected 140 points to close near  the lows at 5408. Breadth was very negative but volumes were below average. Oscillators are moving down and are already below their previous low indicating the support of  5350 may not hold. Macd has made a lower tick but is still in buy mode.

In keeping with the channel pattern forming since the bottom of November 2009 and top of January 2010, the Nifty should correct to the lower trendline of the channel. This week's candle can be identified as a reversal candle -- a higher high, a lower low,  a close at the low of the bearish candle and  a close below the close of the previous candle.Prudence though, would demand waiting for follow up action to the reversal bar to turn bearish.

Chart II shows that  uptrendlines from the March 2009 bottom, if violated,  has led to a fall of  400 to 500 points lasting  3 to 4 weeks. This makes the support on the present uptrendline at 5287 very important. The  channel pattern, mentioned above, also  demands a fall of around 600 points to touch  it's  lower trendline. Thus, if Nifty is not able to take out the high of 5500 , an immediate fall of 500 to 600 points could be expected.

 

 Daily Chart

The daily charts show a bearish engulfing candle on very low volumes . Breadth was negative in a ratio of 1:2. The break below the uptrend line from 4786 and the strong support of the 20 dema is decisive. Nifty took support exactly  on the pink neckline at 5393. Strong support exisits  around the 5350-5393 range. If  this fails, a slide to 5287-5250-5225 is possible.

The oscillators have now moved below the support line which was held since July 2010 ( refer  post of 27th August  for the oscillator chart). Stochastics has moved below the 20 mark which it had last touched on 21st May 2010.

Half Hourly Chart

The expanding triangle on intraday charts is still valid with support on the lower trendline around 5335.


My View

Bearish Pointers

• One day reversal bar on weekly charts after a false breakout on the upside from the upper trendline.
• Respect of resistance at the trendline joining January and April 2010 tops in line with channel pattern.
• Decisive break below  the uptrend line from 4786 and the strong support of the 20 dema.
• Advance decline line has become further bearish.
• Daily Rsi 14  has broken July 2010 support .

Bullsih Pointers

• Lower end of  Range of 5349-5492  still held.
• Weekly Macd in buy mode.
• Fall on low volumes.
• Intraday oscillators and daily stochastics oversold , increasing chances of a bounce.

The long awaited correction may have begun as the bullish pointers are few turning my bias towards being more bearish than bullish. However till the support of 5372 holds hold on to longs. Traders with more risk appetite could wait for a break down from the expanding triangle .



Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 27th August, 2010

Daily Chart

Daily Chart with Oscillators

Inside day. Indecision. Range of yesterday's candle was  5506-5452. Bearish pointer was that trading for the entire day was in the lower part of the range.The recovery was just around 23.6% of the fall of the last 3 days.Bullish pointer was yesterday's low was not violated and thus the 50% fibo level of the rise from 5372 held. The support of the 20 dema too held well. 

Volumes were high and breadth marginally negative.

The oscillators on daily chart have been showing negative divergences on the one hand .They have moved down without reaching over bought levels.  On the other hand, they are also showing strength  with the RSI 14 having held support at 52  during the pullbacks since July 2010.The stochastics too has not gone below the 20 mark. Macd is above zero line. Time to be cautious but not a time to be bearish .

Supports are at 5460-5440-5430-5393.

Resistance at  5490-5501-5512.



Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 26th August , 2010

 Daily Chart 

Another bearish candle following two dojis and a black candle on increased volumes. Today's black candle was certainly not profit booking. Pullbacks were sold into and the fall continued till the close, to close at the lowest point. The 20 dema was support once again.Breadth was bearish.

Daily Macd is once again in sell. OBV continues to move down. The uptrendline joining May 2010 lows of 4786  and the last swing low of 5372 has been broken. Strong support exists at 5370. The 50 dema is at 5378.

Supports are at  5425-5392-5370     and   Resistance at  5477-5488-5512.

 

Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 25th August, 2010

Daily Chart

Nifty witnessed profit taking. I would not call it selling as selling as the ferocity that selling needs was missing.The fall was gradual with pullbacks.The profit booking was across all stocks as the breadth was negative and volumes huge on declining stocks.Total volumes were much higher than  yetserday.

Daily Oscillators have the negative divergence intact.Oscillators on half hourly charts are moving up showing there could be a pullback. The put call ratio remains high cautioning a fall.

Support taken exactly at the 10 dema at 5488 and at the 38.2%  retracement level of rise from 5372 which is at 5486. Further fibo supports of this range is at  5460-5440. The 20 dema is at 5456. The last significant low was made at 5372 . The 50 dema is at 5378.


Supports at 5488-5460-5440-5372.

Resistance at 5513-5528-5547.


Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 24th August, 2010

 Daily Chart

Nifty moved in a very tight range today and closed positive for the day after recording another high of the rally. Resistance of the trendline joining January 2010 and April 2010 highs  was once again hit.Volumes were very low but breadth positive. The Nifty open interest put call ratio is around 2 which is very high and indicates too many put writers. A small bearish trigger may thus precipitate a fall.

Negative divergences are seen on half hourly charts.

Supports are at 5513 -5484 -5452   and resistance at 5550-5603.



Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty 23rd August , 2010

 

Weekly Chart I

Weekly Charts show a bullish breakout from the trading range of 5 weeks between 5350 and 5492. Volumes were not very high . But then, the volumes have been drying up right through the consolidation since May 2009  !  This range breakout gives a target of around 5630. The oscillators are showing strength by moving up again but yet to move above previous highs, thus still in negative divergence.Macd too is in negative divergence but in buy mode since 9th July 2010.

Weekly Chart II

Weekly Advance Decline Line

Since the rally is now almost a year and a half old , a thorough checkup would be necessary. The volume chart shows increasing volumes on falls and declining on rises.Overall too the entire rise is on falling volumes. The advance  decline line too has been constantly falling showing lower and lower participation of stocks in the rise. These two indicators show that all is not well. Increased volumes and participation of more stocks on further increases is desired.

Meanwhile, the daily charts show bullish patterns giving ambitious targets as shown in the daily line chart below.Targets on candle charts may vary by a few points.

Daily Line Chart

Please note that pattern targets are a probability too.It is important to be aware of supports and resistance all the while to be ready for  pullbacks  and failed patterns. It is support  and resistance levels that  lead  to pullbacks  and  throwbacks.

In order to keep our feet firm on the ground some bearish pointers.

• Daily oscillators continue in negative divergence and  OBV too has joined in  after a long time.This is bearish.
• Trendline on Nifty monthly chart joining tops from October 2009 has resistance at 6517. The same trendline on the sensex has the resistance at 18447 which has already been hit.Sensex made a high of 18475 before retracing to close at 18402.

Supports at  5513-5494-5470-5445  Resistance at  5540-5545-5550-5565.



Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty 20th August, 2010

 Daily Chart

Daily Line Chart 

So the inverted head and shoulders target mentioned in my post of 15th June ,was achieved. On 15th June, with the Nifty just recovering from the lows of  4786, it seemed an unachievable task.Proves that patience and sticking to technicals is key to making money in stock markets.

Today's follow up bullish  white candle to  yesterday's bullish candle was very encouraging.Volumes were good and breadth positive. It was a steady up all day with very minor pullbacks which got gobbled up in seconds.

The 4 week range has been broken decisively, giving a target of  around 5600.This coincides with the resistance on the upper trendline of the  green  channel shown on candle charts. The red trendline joining tops of January 2010 and April 2010 proved resistance today and resistance for tomorrow is at 5547. A breakout from this trendline will give a 670 point upmove which is the height of the channel formed since January 2010.

The Line charts show a breakout from the pink channel giving a target of  6185. A little unbelievable but  so was the target of  5513 just 2months back.Staying above the upper trendline at around 5533 is important. The inverted head and shoulder with neckline at 4650 has a target of  6745. Hiccups minor and major in between is bound to occur.

Oscillators on daily charts have started showing strength and Macd has given a buy. Trading in markets which are moving  up the wall of worry is difficult.I would suggest trading light and with proper risk management. Shorts as earlier cautioned would be harmful to health and finance till enough evidence of a continued fall.

Supports are at  5509-5493-5404  and Resistance at  5547-5592.

Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Market Making New Highs?

I have posted a new article at my Amatuer School for Traders, You may read it at ,


http://theamateurtraderschool.blogspot.com/


Please let me know whehter you liked it so that I may be encouraged to write more and improve upon it.


Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty 19th August , 2010

 Daily Chart

 Daily Line Chart

So much for the Chinks in Nifty's armor !  Ha Ha. Nifty   moved up, rejuvenated . Yesterday's inside pattern was broken decisively on the upside .  Today's candle was huge, breaking out of the triangle and closed just 7 points lower than the close high of this rally at 5486.Volumes were good and breadth marginally positive.Line charts show Nifty once again above the green  rising wedge and above the 20 dema.The doji low of  12th August  5372 is now the decider.So stops on longs could be moved to that level.

However the broader range of 5349-5492 still restricts the nifty movement .A move out of this range will be a significant  as it is now 4 weeks inside this range.

Resistance at  5492-5502-5530-5550.  Support at 5453-5414-5397-5372.


Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty 18th August , 2010

 Daily Chart

 Daily Line Chart

Still within the range of 5349-5492. Appearance of expanding triangle, equilateral triangle ( shown in green) and today's candle forming an Inside pattern show how confused and indecisive the market players are.the candle formed today shows inability to maintain highs.Breadth was very marginally negative and volumes below average.

As mentioned yesterday, bearish signs are slowly showing up and today it is seen in the break down from the pink trendline and the 20 dema both of which gave support since the low of July 2010. Daily Rsi14 too has broken it's corresponding low.  OBV has broken the supports corresponding to Nifty's support of 5349 on candle charts and 5367 on Line charts. Line charts show the break of the previous minor trough at 5416 though very marginally. Chinks in Nifty's armor showing.

Since today was an Inside Day, tomorrow's action will depend on which side of yesterday's range is taken out --- 5397 or 5465  !!

Resistance at  5431-5459-5465   and    Support at  5397-5383-5349.


Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty 17th August , 2010

 Daily Chart

 Daily Line Chart

Nifty made a bearish candle with a lower high lower low . The doji on weekly charts had cautioned of a possible weak week of trading. Breadth was negative and volumes high. Volumes of declining stocks was higher.

The uptrendline from 4786 passing through the low of 2nd August at 4351 proved good resistance at  5466. Nifty hit a high of 5465. The resistance from this line tomorrow is at 5478.the 20 dema proved support once again at 5417 with nifty closing just above it.

The nifty continues to flip flop in the range between 5349-5477-5587-5492.Till this tug of war is resolved, trading will be difficult with neither bears nor bulls benefitting. Few new bearish signals have appeared like the bearish alignment of the 5 and 10 day emas and the break of 200 period ema support on half hourly charts.

Line charts show a little more clarity. The trendlines are being broken with ease. The latest short term uptrendline in blue from 5367 has also been broken showing waning momentum.The green rising wedge on line charts have been broken once again.

Longs should keep a strict stop of 5349.

Supports are at  5397-5380-5372-5349.  Resistance at  5323-5332-5445-5465.



Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Diwali Picks Performance

Last Diwali, Nishit and I had prepared a Diwali Picks presentation.You may view them at ,

http://vipreetinvestments.blogspot.com/search?q=diwali+picks

The  performance is shown in the chart below.

The peak performance was 26 pc and average was 20 pc as compared to 6 and 6.8 pc of the Nifty.both of us got the feeling that markets were ripening for a  correction , so decided to review and give some followup view.
We would recommend booking 50% of the portfolio and remaining in cash. Some of the things we noticed:

1. Maruti Sales have recorded all time highs since Diwali, but share prices have gone no where.
2. Titan is a mid-cap which has doubled i value. Each portfolio needs to have certain mid caps.
3. Nifty has gone nowhere but individual stocks have given returns.



Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 16th August, 2010

 

 Weekly Chart

Weekly candle was a doji with  a higher high and higher low. Volumes were higher than that of last three weeks.The Nifty maintained above the 4 week support of 5349 , making it the 5th week of holding the support. .The upper limit of the  range was once again expanded by 5 more points making it  5349-5492. This expansion on the upper end of the range with the bottom remaining around 4350 explains the expanding triangle seen on half hourly charts. Thus we may see weakness only below 4350.The negative divergences on the oscillators are intact. This week's doji is alerting as it could be signalling bearish having occured at the current top.Confirmation of it's bearishness is required with bearish followup next week.

Daily Chart

Daily Line Chart

The daily candle charts shows a morning star formation which is very bullish . This formation is very effective when it appears after a long downtrend. Though the Nifty did have a fall in the last few days, the fact that it is near the top of this rally should be borne in mind while thinking bullish. On the other hand, the fact that yesterdays indecisive doji was followed up by a decisive white candle which made a higher high and higher low confirms the pattern.Fresh longs can keep a stop at the low of yesterday's doji at 5372. Positional old  longs should raise the stop to a close below 5349.To add to the strength shown by Nifty is the fact that the break down from the green rising wedge on line charts proved false.The 20 dema too was good support and is now at 5417 which is the swing low on line charts.

Half Hourly Chart

On Half  hourly charts the bearish  expanding triangle continues to play havoc and  slaughter pigs.I borrowed these lines from the web to get a better insight into what the expanding triangle conveys:

Unlike other triangles, the expanding triangle is  one  where indicators become more and more unpredictable, the price makes wider fluctuations, and volatility keeps increasing as the bounds of the range expands.
Unlike the other triangle patterns, the expanding triangle is a reversal pattern. It is rare to find it during a continuation phase, and it certainly doesn’t signify a period of consolidation. Instead, the expanding triangle is often found accompanying double, triple tops or bottoms, where one side of the triangle remains somewhat static, as the other leg expands to the other side, depending on the nature of the trend. It is a clear sign that the trend is running out of momentum, and that the traders see a large counter trend movement as more viable and logical than another leg in the direction of the existing trend.

Supports  at  5436-5424-5417-5378-5349.
Resistance at 5466-5476-5498-5538.


Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty 13th August , 2010

Daily Chart

Nifty made a doji with a long lower shadow which shows  support at the lows made today. The bias though is still negative with a lower high and a lower low. The trendline joining the low of 4786 and the latest swing low of  5351 made on 2nd August, has been broken. We may expect the fall to continue or a sideways movement. Breadth continues to be negative and volumes above average.OBV continues to move down . Close is above the 20 dema which is at 5413.70.All EMAs on daily charts continue to be bullishly aligned.

5367 was very good support as I have been showing on the daily line chart since a few days.The low made today was close to it at 5372.Till this level and 5349 on candle charts hold we may not see further fall.The lower trendline of the expanding triangle on half hourly charts is around 5340. The 5349 level has been strong support since the last four weeks. Thus the 5349-5340 level would serve as a deciding factor in the short term.

Resistance is at 5432-5446-5455-5475  and Support is at  5403-5372-5349.



Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 12th August, 2010

 Daily Chart

Daily Line Chart

Caution call  finally justified . Nifty broke down from yesterday's inside pattern on good volumes with negative breadth. Nifty has taken support exactly at the 20 dema.

The rising wedge shown on line charts has been broken giving a target of around 5175. The support of 5431 broke as indicated by OBV yesterday.The OBV has broken the low of 30th July which corresponds with the Nifty's 5367on line charts and 5349 on candle charts. 5349 is strong support and a break could drag the nifty down to 5225-5200 .

50 dema has support at 5332.The expanding triangle on half hourly charts has support around the 5342 levels.  The nifty may find support around the 5332-5342-5349 levels in the immediate term. This would be a good stop loss level for bulls still holding positional longs .

Resistance at 5430-5452-5462.

Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty 11th August , 2010

 Daily Chart

Daily Line Chart

 Half Hourly Chart

The broadening triangle's upper trendline offered strong resistance and Nifty reacted as expected to correct 45 points on good volumes. Support was found exactly on the dotted trendline  joining the low made on 30th July 2010.The Obv on daily charts has broken it's bottom made on 6th August .The corresponding low of Nifty  on Line charts is at  5431 .

Breadth was negative and Volumes were higher than the past few days. The declining volumes were much higher than the advancing volumes.Negative divergence on daily charts are intact.

Check for supports and resistance marked on the charts.


Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 10th August, 2010

 

 Daily Chart

Daily Line Chart

Nifty continued climbing the wall of worry , with me too participating  in the worry group since Friday. Booked some profit and hedged a few of the remaining positions.

The breadth was good. Volumes were more than average, with advancing volumes  much higher than declining volumes.The candle was bullish and recorded a new high for the rally from March 2009.  The rising wedge shown on the line chart has resistance at 5495.The candle charts show a resistance of 5551. New support cemented at 5426-5431.

Half Hourly Chart

A broadening triangle seems to be forming on intraday charts but the difference in the swing highs and lows is very marginal.The shape that best captures this pattern is that of a megaphone. However, the charateristics of the broadening triangle seem to be adhered to.

"  The classic technical analysis text by Edwards and Magee characterizes a broadening top as a market that lacks intelligent sponsorship. It is one in which the public is being whipped around and driven this way and that by rumors. As such, volume during the broadening top pattern tends to be irregular. During some rallies volume may expand, but during others it tends to be tepid. The same pattern applies on pullbacks. Because it is so unpredictable, the broadening top pattern is extremely difficult to trade. There is no clear breakout to either the upside or downside edge of the pattern." 

The heading for the broadening top on one of the sites is,  

WHEN YOU SEE A BROADENING TOP, THE MARKET WILL EVENTUALLY DROP

Prudence would require booking some profits and hedging long positions.


Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 9th August, 2010

Weekly Chart

Though the candle for this week is a bullish candle and the Nifty made a new high , the action was almost within the range of 5349-5477 adding just 10 points on the upper end. The volumes  As seen on the weekly chart Nifty has cemented support at 5349 since last four weeks. This becomes a crucial decider in defining further trend. Till this level is held Nifty will  attempt to move higher.

Daily Chart

Chose to analyse the Line Chart instead of the OHLC charts . Line charts  put it across simply, clearly . After going through the noise in the OHLC charts,  Line charts feel  like a breath of fresh air. Just a glance tells you  that, in the run from 4786 ,  the Nifty has taken  three breaks, shown by the blue dotted  lines,  to catch up it's breath. The continuation after rest time has been with weakening vigour. Rests are getting more frequent.The  run up after the first lap, which ended at 4366, has formed a rising wedge shown in green.

The rising wedge is a bearish pattern that begins wide at the bottom and contracts as prices move higher and the trading range narrows. Volumes fall as the wedge matures. Volumes have been falling since the first peak made on 21st June. This is in line with the pattern requirements. The support on the lower trendline of the pattern is at  5412.Resistance on the upper trendline is at 5491.



The two stages where Nifty took rest is at  5235 and 5367. If the rising wedge breaks down as anticipated, Nifty will seek to stop the slide  at the previous rest zones of 5367  and  then 5235, hoping to garner strength to rise again. After all  no one likes to fall !

Cushion available at 5402- 61.8% retracement ( rise from 5349-5487 ),  20 dema -5399 , 5349-solid cushion on OHLC charts shown on weekly charts and 50 dema -5317.

Hurdles at  5472-5487-5522.


Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 6th August , 2010

 Daily Chart

Half Hourly Chart

The Nifty continued to make a higher high and higher low candle but failed to sustain the new highs made at 5487. The caution that one needs to be hedged on longs paid off. The bias is still  up though today's last hour correction must have unnerved the bulls.The advance declines were 1:1 .The volumes flowing into advancing stocks has been declining since the last few days.

The negative divergence on daily oscillators  persists.The 20 dema offers support at 5395.

Nifty has taken support at the 50 ema on half hourly charts at 5447. The short term up trendline has been broken indicating more fall. The fibo supports are at 5435-5418-5401. The 200 ema  has support at 5410.Strong support at 5349. Only a break of this level will turn the short term trend down.

Nifty gave a false breakout from the range high of 5477 on candle as well as line charts.Today's fall was on higher volumes than that of yesterday's rise.The rise from 5210 onwards has been on falling volumes. The last few days action shows nervous and confused market players.

Risk management at this point of time is most important. Play light and play safe.

 

Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty 5th August , 2010

 

 Daily Chart

Half Hourly Chart

Nifty  maintained the higher high higher low formation after putting up a tease for most of the trading session , leaving a lot of pigs slaughtered . It was difficult to guess that there would be a last hour spike to register a new high.Though the close was below the high , it was the highest close of this rally.The range has finally broken on the upside. A close above the range though, would have been ideal -- The range on Line charts (EOD values)  5367-5449 has been broken decisively. technically the breakout has a target of 5580.The head and shoulder target is at 5513.

The oscillators though have not participated in the party and have kept the negative divergences intact. Negative divergences are seen on half hourly charts too. The Nifty has been  on a run  for 17 months with  a lot of hesitation. In other words "climbing the wall of worry" . Maybe this over  cautious approach by market participants is what is keeping the trend up. However, one needs to be hedged on longs ,and, as advised earlier no shorts till a confirmation that bulls have surrendered to the bears. Better safe than sorry.

Strong resistances are at  5500-5520-5535. Supports at  5450-5426-5400-5349.
Support for old  positional longs at 5349 and fresh longs at  5435 on an intraday hourly close.


Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty 4th August , 2010

 Daily Chart

Nifty continued making a higher high higher low for the second consecutive day.Volumes were good. The candle however failed to keep up with the bullish candle of yesterday. On the other hand it made a shooting star which has bearish implications. It is not an ideal shooting star but the longer upper shadow , small real body towards the low and the high levels that Nifty is trading at , makes me cautious .Moreover yesterday's bullish candle was not accompanied by good volumes.  There is a  potential head and shoulder bearish pattern which has the neckline at 5350. The oscillators too are not showing strength.

Half Hourly Chart

Half hourly charts show the bullish side of today's trade. Trade was above the 61.8% fibo level as shown on the chart . Intraday corrections found support at that level.Half hourly emas continue to be bullishly aligned.

Conclusion
Nifty continues to be within the 5349-5477 range which I mentioned as a no trade zone. Direction will be clear only after a break from this range. Till the top of 5477 is taken out decisively , chances of breaking the neckline at 5349 seems higher .

Supports are at  5414-5397-5364-5349 and  Resistance at  5445-5459-5477.

Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty 3rd August , 2010

Daily Chart

Nifty took bears by surprise with a gap up opening on the futures by more than 30 points.Of course as mentioned yesterday, the half hourly oscillators had shown a positive divergence and shorts needed to be prepared for a pullback.

A higher high and higher low candle was formed raising hopes of a rally. Breadth was positive but volumes failed to impress. Trading was up all day with minor pullbacks leading to a breakout from the short term downtrendline from 5477 highs. The close at 5431 is above the 61.8% retracement level of the fall from 5477 to 5349  and above all the short term , 5-10-20 demas. Rsi 14 and Obv  on daily charts has given a minor positive divergence.The half hourly  10-20-50 ema   are once again bullishly aligned. These are bullish signs and Nifty may retest 5477.

The potential head and shoulder bearish pattern which is now visible on the daily charts too, has the neckline at 5350 .The range between 5350 and 5477  becomes a no trade zone as only a break above or below the range will give a directional move.

Supports are at  5417-5407-5400-5383  and  Resistance at  5438-5450-5477




Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty 2nd August , 2010

Monthly Chart 

The monthly charts have a breakout on line charts but failed to hold the breakout on candle charts. The breakout above the downtrendline from January 2008 highs is however maintained. Low volumes for the month makes one cautious  of the breakout. Support on uptrendline from March 2009 lows and on the downtrendline from Jan 2008 highs coincide around the 5272-5262 levels making it important for Nifty to sustain above these levels. Break below these levels should find support on the trendline joining lows since August 2009 at 4988. Momentum oscillators continue showing negative divergence.

Weekly Chart

A lower high lower low bearish candle breaking down from the rising wedge.Volumes were higher than on the last week's rise.The strong support of last two weeks of 5350 was violated intraday but managed to close above it. Oscillators continue to show negative divergence. The green trendline,  ( pointed out by  Rahul , a boarder on the discussion  forum  of  Vipreetsafetrading.com ),  has been strong resistance since two years !!  Resistance at 5540 on this trendline. The downtrendline from Jan 2008 highs to the recent high of 5477 offers resistance at 5465. Supports at 5243.

Daily Chart

The Nifty made a huge bearish candle but kept bullish expectations alive by closing above the important support of 5353. Volumes too were very low  and breadth  marginally negative. The falling channel was maintained and now has resistance at 5409 and support at 5352.The short term trend will be down once this level of 5353 is broken on a closing basis and is likely to find support at 5315, which is the 61.8%                 ( 5210-5477 rise) and the 23.6%(4786-5477) fibo levels coinciding. The 20 dema at 5369 has been violated and the 50 dema has support at 5288. Medium term remains up till the support of 5210-5225 is held. Daily oscillators have made new lows.

Half Hourly Chart

The neckline of the head and shoulder pattern on half hourly charts has been broken setting a target of 5277. Positive divergence is seen on the oscillators.




Bearish Points
Advance decline line has been showing a downtrend  since January 2010.
Negative divergences have been persisting on all time frames since January 2010.
The rally from 4786 formed a rising wedge, a bearish pattern, which has been broken.
A lower high and lower low candle formed on the weekly charts.
Nifty has closed below all short term emas , 5,10 & 20 .
The rally from 4786 made a lower high candle after nine weeks of higher highs which is line with the pattern followed since August 2009.This makes the rally ripe for a correction timewise.


Bullish Points

The Nifty is bullish in the  longer term  as correction of each rally has failed to break the previous correction low.
Moving avearges on daily , weekly and monthly charts continue to be bullishly aligned.


My View

In the short term  bearishness seems to have creeped in. The longer term  however continues to be bullish.Longs therefore need to be cautious. Reducing one's exposure and remaining hedged would be prudent. Shorts to be attempted only after a decisive close below the 5200-5235 level.

Supports at 5350-5344-5315-5225  and  Resistance at  5385-5400-5416-5440.

Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com