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Om  Sri  Ganeshaya  Namaha
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Sunday, August 8, 2010

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


rani patel said...

Very lucid reading and thanks for the early post.

Lakshmi Ramachandran said...


Sujatha said...

Thank you very much for the early post :)

Hurdles at 5472-5487-5422, you have mentioned 2 upper levels, then why one lower level of 5422?? or 5492??

Kindly ignore my ignorance.

Lakshmi Ramachandran said...

corrected 5522

sachinadvai said...

I have a doubt regarding the lines many technical analysts including you draw , as far as I know there is a minimum requirement of three points to draw the lines, isn't it ? , Please Clarify.
Many Thanks.

Lakshmi Ramachandran said...

Sachin, two points are enough. Of course , more the number of points more the credibility in what the trendline conveys.

Unknown said...

very simple but very convincing and authoritative analysis. keep it up.


Lakshmi Ramachandran said...

meenakshi, thanks for giving a new definition to my analysis