Reigning The Nifty - 6th August , 2010

 Daily Chart

Half Hourly Chart

The Nifty continued to make a higher high and higher low candle but failed to sustain the new highs made at 5487. The caution that one needs to be hedged on longs paid off. The bias is still  up though today's last hour correction must have unnerved the bulls.The advance declines were 1:1 .The volumes flowing into advancing stocks has been declining since the last few days.

The negative divergence on daily oscillators  persists.The 20 dema offers support at 5395.

Nifty has taken support at the 50 ema on half hourly charts at 5447. The short term up trendline has been broken indicating more fall. The fibo supports are at 5435-5418-5401. The 200 ema  has support at 5410.Strong support at 5349. Only a break of this level will turn the short term trend down.

Nifty gave a false breakout from the range high of 5477 on candle as well as line charts.Today's fall was on higher volumes than that of yesterday's rise.The rise from 5210 onwards has been on falling volumes. The last few days action shows nervous and confused market players.

Risk management at this point of time is most important. Play light and play safe.

 

Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty 5th August , 2010

 

 Daily Chart

Half Hourly Chart

Nifty  maintained the higher high higher low formation after putting up a tease for most of the trading session , leaving a lot of pigs slaughtered . It was difficult to guess that there would be a last hour spike to register a new high.Though the close was below the high , it was the highest close of this rally.The range has finally broken on the upside. A close above the range though, would have been ideal -- The range on Line charts (EOD values)  5367-5449 has been broken decisively. technically the breakout has a target of 5580.The head and shoulder target is at 5513.

The oscillators though have not participated in the party and have kept the negative divergences intact. Negative divergences are seen on half hourly charts too. The Nifty has been  on a run  for 17 months with  a lot of hesitation. In other words "climbing the wall of worry" . Maybe this over  cautious approach by market participants is what is keeping the trend up. However, one needs to be hedged on longs ,and, as advised earlier no shorts till a confirmation that bulls have surrendered to the bears. Better safe than sorry.

Strong resistances are at  5500-5520-5535. Supports at  5450-5426-5400-5349.
Support for old  positional longs at 5349 and fresh longs at  5435 on an intraday hourly close.


Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty 4th August , 2010

 Daily Chart

Nifty continued making a higher high higher low for the second consecutive day.Volumes were good. The candle however failed to keep up with the bullish candle of yesterday. On the other hand it made a shooting star which has bearish implications. It is not an ideal shooting star but the longer upper shadow , small real body towards the low and the high levels that Nifty is trading at , makes me cautious .Moreover yesterday's bullish candle was not accompanied by good volumes.  There is a  potential head and shoulder bearish pattern which has the neckline at 5350. The oscillators too are not showing strength.

Half Hourly Chart

Half hourly charts show the bullish side of today's trade. Trade was above the 61.8% fibo level as shown on the chart . Intraday corrections found support at that level.Half hourly emas continue to be bullishly aligned.

Conclusion
Nifty continues to be within the 5349-5477 range which I mentioned as a no trade zone. Direction will be clear only after a break from this range. Till the top of 5477 is taken out decisively , chances of breaking the neckline at 5349 seems higher .

Supports are at  5414-5397-5364-5349 and  Resistance at  5445-5459-5477.

Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty 3rd August , 2010

Daily Chart

Nifty took bears by surprise with a gap up opening on the futures by more than 30 points.Of course as mentioned yesterday, the half hourly oscillators had shown a positive divergence and shorts needed to be prepared for a pullback.

A higher high and higher low candle was formed raising hopes of a rally. Breadth was positive but volumes failed to impress. Trading was up all day with minor pullbacks leading to a breakout from the short term downtrendline from 5477 highs. The close at 5431 is above the 61.8% retracement level of the fall from 5477 to 5349  and above all the short term , 5-10-20 demas. Rsi 14 and Obv  on daily charts has given a minor positive divergence.The half hourly  10-20-50 ema   are once again bullishly aligned. These are bullish signs and Nifty may retest 5477.

The potential head and shoulder bearish pattern which is now visible on the daily charts too, has the neckline at 5350 .The range between 5350 and 5477  becomes a no trade zone as only a break above or below the range will give a directional move.

Supports are at  5417-5407-5400-5383  and  Resistance at  5438-5450-5477




Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty 2nd August , 2010

Monthly Chart 

The monthly charts have a breakout on line charts but failed to hold the breakout on candle charts. The breakout above the downtrendline from January 2008 highs is however maintained. Low volumes for the month makes one cautious  of the breakout. Support on uptrendline from March 2009 lows and on the downtrendline from Jan 2008 highs coincide around the 5272-5262 levels making it important for Nifty to sustain above these levels. Break below these levels should find support on the trendline joining lows since August 2009 at 4988. Momentum oscillators continue showing negative divergence.

Weekly Chart

A lower high lower low bearish candle breaking down from the rising wedge.Volumes were higher than on the last week's rise.The strong support of last two weeks of 5350 was violated intraday but managed to close above it. Oscillators continue to show negative divergence. The green trendline,  ( pointed out by  Rahul , a boarder on the discussion  forum  of  Vipreetsafetrading.com ),  has been strong resistance since two years !!  Resistance at 5540 on this trendline. The downtrendline from Jan 2008 highs to the recent high of 5477 offers resistance at 5465. Supports at 5243.

Daily Chart

The Nifty made a huge bearish candle but kept bullish expectations alive by closing above the important support of 5353. Volumes too were very low  and breadth  marginally negative. The falling channel was maintained and now has resistance at 5409 and support at 5352.The short term trend will be down once this level of 5353 is broken on a closing basis and is likely to find support at 5315, which is the 61.8%                 ( 5210-5477 rise) and the 23.6%(4786-5477) fibo levels coinciding. The 20 dema at 5369 has been violated and the 50 dema has support at 5288. Medium term remains up till the support of 5210-5225 is held. Daily oscillators have made new lows.

Half Hourly Chart

The neckline of the head and shoulder pattern on half hourly charts has been broken setting a target of 5277. Positive divergence is seen on the oscillators.




Bearish Points
Advance decline line has been showing a downtrend  since January 2010.
Negative divergences have been persisting on all time frames since January 2010.
The rally from 4786 formed a rising wedge, a bearish pattern, which has been broken.
A lower high and lower low candle formed on the weekly charts.
Nifty has closed below all short term emas , 5,10 & 20 .
The rally from 4786 made a lower high candle after nine weeks of higher highs which is line with the pattern followed since August 2009.This makes the rally ripe for a correction timewise.


Bullish Points

The Nifty is bullish in the  longer term  as correction of each rally has failed to break the previous correction low.
Moving avearges on daily , weekly and monthly charts continue to be bullishly aligned.


My View

In the short term  bearishness seems to have creeped in. The longer term  however continues to be bullish.Longs therefore need to be cautious. Reducing one's exposure and remaining hedged would be prudent. Shorts to be attempted only after a decisive close below the 5200-5235 level.

Supports at 5350-5344-5315-5225  and  Resistance at  5385-5400-5416-5440.

Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com