Weekly Chart
Weekly Chart II
Negatives :
- A huge bearish candle after a series of dojis showing it was distribution rather than a stalling of selling as had been assumed due to low volumes.
- The 20 and 40 wema gave a death cross , shown by the red sell arrow , indicating more bearishness in the future.
- The lower low lower high continued into this week keeping with the negative bias.
- Trade below the uptrendline from March 2009 for the fifth week (brown dotted line).
Positives :
- Fall was on extremely low volumes indicating selling more due to lack of buying strength than deliberate selling.
- Red trendline joining lows from June 2009 given good support once again.
- Low of 5328 made on week ended 27th May held.
- Low of 5177 made on 11th Feb still not violated keeping the medium term trend UP.
- 100 wema which is a good support during uptrends is still unviolated.
Last week's positives remain intact.The assumption that selling was waning proved wrong. However the volumes still remain low showing bears lack conviction.
Support taken exactly on the red trendline joining lows from June 2009. Support for next week on this trendline at 5370. Supports around the 5300 levels available in plenty-- 100 dema, previous resistance/support as shown by the blue horizontal line . Refer to the charts in my earlier weekly post about this level here --http://vipreetinvestments.blogspot.com/2011/05/reigning-nifty-weekly-update-28th-may.html
Till 5300 holds sudden recovery efforts by bulls could happen. Chart II shows stochastics has reached oversold levels which normally leads to some recovery. No positive divergences as yet so any pullback should be shallow.
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Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com
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