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Monday, November 22, 2010

Reigning The Nifty - 22nd November, 2010

 Weekly Chart

Last week I wrote, " The filling up of the gaps and the bearish engulfing candle being formed on much higher volumes than on the previous week's bull candle are two more nails in the coffin. Confirmation  in the form of a black candlestick, a large gap down or a lower close is required on the third candle. Watch out for these features on the coming week's candle".  

The bearishness has been confirmed by a bearish black candle giving a close below the important support level of 5937 and stopped around the support of 5860 shown in last week's weekly chart..This gives a potential target of 5540. The only positive is that the volumes were below average.Breadth though was very negative.Oscillators have broken levels held since 5348 lows.Macd is on the verge of giving a sell.

Supports are at 5816-5707-5622-5522.  Resistance at 5972-6024-6144.

Daily Chart

With the last swing low 5937 broken, the next previous low at 5348 comes into contention.Supports to prevent this level from being tested are at 5848-5816-5730-5642. Though the time taken to break the  support of 5937 took longer than the rise indicating it is just a correction, the  fall has been sharp and without respite giving one the feeling of more selling to come.

Oscillators have broken levels held since 5348 lows.Stochastics is now in extreme oversold zone and Macd is below zero line.

A close below 5875 will break the uptrendline from March 2009 lows on line charts.The same trendline on candle charts has support at 5747.Violating these levels will mean the uptrend from March 2009 is over.Holding these levels  therefore, is important if the uptrend is to continue.

Only  if the level of 6000-6045 is crossed decisively can the uptrend have chances of resuming.

Supports are at 5848-5816-5730-5642  and  Resistance at  5900-5921-5939-5955-6000.

Half Hourly Chart


Half hourly chart shows break down from the expanding triangle..The sharp downtrnding channel which was violated once has given support again.A break out from this channel will be required for any upside attempts.
The levels for such a breakout should be around 5980-6000.

Happy Trading !!
Lakshmi Ramachandran

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