Om Sri Ganeshaya Namaha

Om  Sri  Ganeshaya  Namaha
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Thursday, March 10, 2011

Reigning The Nifty - 10th March 2011

 Daily Chart

Two way movement ending in a doji  showing indecision. The 50 dema continues moving away from the 200 dema bearishly. The short term avearges however are showing bullishness -- the 10 crossed above the 20 dema . Close was above the red trendline which has been elusive for some time now.Breadth among the Nifty stocks was a 1:1 .Volumes were very average.OBV has crossed it's recent peak corresponding with Nifty's 5608.

Half Hourly Chart

The latest action shows a diamond pattern which is essentially a distribution pattern. The moving averages on half hourly charts are all bullishly aligned. This increases the possibility of the diamond pattern may turn out to be  a continuation pattern and break out bullishly in continuing with the short term uptrend since 5232. Volumes may give more insight into the bearish or bullish confusion. See the daily chart below.
Daily Chart

Low volumes during diamond formation and negative divergence on stocahstics points to the diamond being bearish.

Verdict  will be out only when the Nifty tells us whether it is bullish ore bearish. The short term trader should watch for a break of the red uptrendline on half hourly charts to pare long positions. The broad trend is down so tighten your stops on longs.

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Happy Trading !!
Lakshmi Ramachandran

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