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Monday, June 10, 2013

Reigning The Nifty - A peek into today's Analysis

Weekly Chart

Daily Chart

Half Hourly Chart

Fibonacci Resistance

Fibonacci Support

Bearish Case :

  • Nifty trapped the bulls with a pullback resisting at 5970 ( strong resistance level and the 38.2% fibo level of fall from 6133 to 5869.) and  has ended in a potential double top which will get confirmed on a break below 5870.Break below 5870 will take the Nifty to 5770 levels.
  • A shooting star was formed and a close below it's low  of  5871 will confirm it’s bearishness.
  • The sloping neckline of the head and shoulder pattern, clearly visible on half hourly charts, was broken once again and closed the day below it giving a target of 5619.
  • The pullback seen today  resisted at the 7 Sma and 50  Ema , the moving averages have started sloping down and a lower high lower low sequence is intact indicating the trend is clearly down.
  • Rsi14 is below the 50 line and  moving down exhibiting weakness.Macd has moved below the zero line.
  • The weekly charts show a bearish break of the Inside day pattern confirming weakness which will lead to a test of the 5600 levels.
Bullish Case :

  • The pennant in which  Nifty is moving is a bullish pattern and expected to break upwards.
  • Yesterday's low at 5869 was maintained and an inverted hammer was formed at the support line of the bullish pennant.This is a bullish sign and the  Nifty should move higher from here provided the low of 5869 is held.
  • The crucial  gap support at 5854-5837 is intact.
  • Nifty is much above the 200 Ema which is bullish territory.
  • The stochastics  giving a buy in the oversold region.
  • The uptrendline from 2009 lows is intact keeping the long term trend up.

 Conclusion :

The shooting star will be confirmed if the low at 5871 is taken out and Nifty closes below it.If however the bulls manage to protect the low at 5869 the inverted hammer could play out it's bullish character.

The weekly charts have turned bearish with the Inside day pattern showing the direction to the downside. The short term for Nifty has truned down and a test of 5750-5600 is on the cards.

 The 50 Ema at 5944,  7Sma at 5956 and the 20 Ema at  5991  are the resistances to overcome. 6049 is the point of breakout from the pennant.If these resistances are respected the fall may resume.
Supports are available at   5871-5853-5837.

Half hourly charts are depicting the pennant well  and would be easy to follow in case of a
turnaround.A break above 6068-6 058 will be bullish whereas a break below 5870 will be bearish with an immediate target of 5770.

Selling on rallies should be the mantra.

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Happy Trading !!

Lakshmi Ramachandran

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