The downtrendline from 6338 highs proved resistance once again. The resistance on the trendline for August is at 5682.A simple deduction from this level would be , above 5682 the Nifty could rally to 6042 and below 5682 could melt down to 5440 and lower.
Monthly Chart showing Volumes
Volumes have been extremely low since January 2010 indicating a complete lack of buying interest. This coupled with moderate selling is seeing the market drift south, thus falling under its own weight.
An outside day pattern which is basically a one day reversal pattern.It indicates some indecision in the market as neither the bulls nor bears were in control for the whole week. However, the big bearish candle on huge volumes could mean more bearishness.Stochastics has turned down below the overbought line and is in a sell indicating more weakness could be in store.
Weekly Chart II
Did a fibonacci retracement study of the Nifty and found confluence of fibonacci and support levels for two price ranges at 3 levels.Explains the reason why the Nifty is reluctant to stay below 5380 for long.If breaks once again then the 4786 should be strong support with a confluence at that level too.
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