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 !!