Reigning The Nifty - 7th September, 2009

 Weekly Chart

 

Daily Chart 

 Half Hourly Chart

Series of falling wedges on half hourly charts

Thursday's candle was an inverted hammer and Friday's bullish candle was a confirmation to it's bullishness. This clearly signals that we may see more upside. The strong resistance of 4650 has also been scaled easily and the close of Friday at 4680 was just above the 61.8% retracement level of the fall from 4744 to 4576.
However doing the  health check of the Nifty is very necesssary.

Momentum

• Weekly oscillators have not shown any change having moved lower from the overbought region since mid June when the Nifty hit a high of 4693 thus negatively diverging fromthe Nifty which has made a higher high of 4744 in the last week of August. The Macd is still in a buy mode but narrowing the gap with it's signal line.This calls for caution as momentum is not in sync with price.
  
• Daily oscillators are yet showing negative divergence.Stochastics has given a buy in the oversold region. .Macd gave a whipsaw and is ready to give a buy again.
  
• Intraday oscillators  are all moving up once again .

Momentum is not all that rosy and the stance according to this would be neutral.  

Moving Averages

Moving averages on all time frames are bullishly aligned.

 

Sentiment Indicators

• Volumes were lower on the fall and was high on Friday when the market rose .
• Put Call ratio today was 1.22  indicating oversold markets.
• Advance declines did not fall much and improved since the inverted hammer day.
• OBV is in negative divergence  .
  

Bearish Pattern

• The action since May 14 low of 3537 has taken the shape of a rising wedge, which is a bearish pattern. Break down from the wedge could give a 1200 point move. Negating it would require the Nifty to break above the upper trendline of the wedge .

Bullish Pattern

• An inverse head and shoulder pattern is seen forming with neckline at 4750 .Break out from the pattern could give a 2400 point move up.
• Falling wedge pattern  on half hourly charts broken out on 17th July with a target of 5129.
  
• A falling wedge formation shown on intraday charts from which the Nifty has broken out on 21st August giving a target of 4934.
• A falling wedge from which Nifty borke out on friday 4th September, giving a target of 4770.
  

Nifty is labouring towards highs as health does not permit. As per articles I have read on Price to Equity ratio the Nifty is fully valued. Any further upside thus, should not be sustainable. However , technically,  the recent action shows more upside targets for the Nifty.  Scaling of the rally high of 4744 is necessary though.

Though momentum is playing hide and seek with Nifty , price tells us that the Nifty is up till the recent low of 4576 holds.I would prefer to hold  hedged  longs with a stop loss of 4576.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 4th September, 2009

 Half Hourly Chart

 

Half Hourly Chart with Falling Wedge and Triangle

Daily Chart

An exhausting session of trade keeping the bulls and bears on tenterhooks.

Bearish Case

• The long uppershadow of today's candle
• Close below yesterday's close 
• The OBV has once again broken below the uptrendline from March lows.
• Daily Macd given a sell
• Moving averages on half hourly charts are bearishly aligned
• Nifty closed below the 200 period EMA on half hourly charts
• Oscillators on half hourly charts are weak

 Bullish Case

• Daily RSI 14 above 50 levels
• Daily moving averages bullishly aligned
• The fall has been on progressively lower volumes
• The pattern formed on daily charts during this fall is a falling wedge 

The triangle breakout shown on half hourly charts has a target of 4530.The lower trendline of the falling wedge has support at 4528 on daily charts.This should be good support .A breakout from the falling wedge at 4609 should lead to upsides. But before turning bullish 4650 needs to be overcome which has proved strong resistance for the past  two days. A weekly closing above 4450 will keep the hopes of a rebound alive as it is the weekly support level of uptrendline from March lows.
Supports and Resistance levels are marked on the charts.




Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 3rd September , 2009

Daily Chart

 Half Hourly Chart

Third day of lower bottom lower top  . From the action today it seems that fall will find support soon since Nifty was finding support at every fall. Of course there was selling at every rise too but at the moment we need to check whether the selling is getting arrested.The day's candle therefore formed  a doji like pattern  indicating indecision. 

Intraday Charts

 All moving averages 5,10,20,50   bearishly aligned, but yet above the 200 ema. 200 ema  offers support at 4591.Oscillators have started moving up without touching the oversold zone barring the stochastics. This could be a sign of strength or may be sign indicating more selling to come. 

Daily Charts 

 All moving averages bullishly aligned. Rsi14 is above 50 and Macd is yet in buy mode. Stochastics has moved below 50 but yet to reach oversold zone.

The support on the uptrendline from March 2009 lows has support at 4551 on daily charts and at 4524-4540 on half hourly charts. 4549 is the 50% retracemnt level of rise from 4353. So watch out for a rebound from around the 4525-4550 levels.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 2nd September, 2009

Daily Chart

Half Hourly Chart

The buy in the half hourly stochastics gave a good bounce and was sold into as anticipated. Volumes were high and breadth negative. The intraday and daily oscillators indicate more room for selling. Strong support is seen at 4500 levels.



Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 1st September , 2009

 

 

 Daily Chart 

 

 Half Hourly Chart

As anticipated the upper trendline of  the rising wedge proved stiff resistance and the Nifty corrected by more than a  100 points intraday and  closed down by 70 points. Fall was on higher than average  volumes which is concerning. However breadth was surprisingly positive.Support of  4650 was violated  intraday but closed above it. 

Intraday and Daily oscillators  show some more room for downside. Only the intraday stochastics has given a buy from oversold region. This may lead to a small bounce which could get sold into. Short term moving averages, 5,10 & 20  period, on half hourly charts are now bearishly aligned.

4582 should be good support. If this is broken we may see 4500.  4507 is the support on trendline joining lows of 3918 made on 13th July 2009  and 4353 made on 19th August 2009 .  Other support levels are marked on the charts.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com