Reigning The Nifty 13th August , 2010

Daily Chart

Nifty made a doji with a long lower shadow which shows  support at the lows made today. The bias though is still negative with a lower high and a lower low. The trendline joining the low of 4786 and the latest swing low of  5351 made on 2nd August, has been broken. We may expect the fall to continue or a sideways movement. Breadth continues to be negative and volumes above average.OBV continues to move down . Close is above the 20 dema which is at 5413.70.All EMAs on daily charts continue to be bullishly aligned.

5367 was very good support as I have been showing on the daily line chart since a few days.The low made today was close to it at 5372.Till this level and 5349 on candle charts hold we may not see further fall.The lower trendline of the expanding triangle on half hourly charts is around 5340. The 5349 level has been strong support since the last four weeks. Thus the 5349-5340 level would serve as a deciding factor in the short term.

Resistance is at 5432-5446-5455-5475  and Support is at  5403-5372-5349.



Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 12th August, 2010

 Daily Chart

Daily Line Chart

Caution call  finally justified . Nifty broke down from yesterday's inside pattern on good volumes with negative breadth. Nifty has taken support exactly at the 20 dema.

The rising wedge shown on line charts has been broken giving a target of around 5175. The support of 5431 broke as indicated by OBV yesterday.The OBV has broken the low of 30th July which corresponds with the Nifty's 5367on line charts and 5349 on candle charts. 5349 is strong support and a break could drag the nifty down to 5225-5200 .

50 dema has support at 5332.The expanding triangle on half hourly charts has support around the 5342 levels.  The nifty may find support around the 5332-5342-5349 levels in the immediate term. This would be a good stop loss level for bulls still holding positional longs .

Resistance at 5430-5452-5462.

Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty 11th August , 2010

 Daily Chart

Daily Line Chart

 Half Hourly Chart

The broadening triangle's upper trendline offered strong resistance and Nifty reacted as expected to correct 45 points on good volumes. Support was found exactly on the dotted trendline  joining the low made on 30th July 2010.The Obv on daily charts has broken it's bottom made on 6th August .The corresponding low of Nifty  on Line charts is at  5431 .

Breadth was negative and Volumes were higher than the past few days. The declining volumes were much higher than the advancing volumes.Negative divergence on daily charts are intact.

Check for supports and resistance marked on the charts.


Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 10th August, 2010

 

 Daily Chart

Daily Line Chart

Nifty continued climbing the wall of worry , with me too participating  in the worry group since Friday. Booked some profit and hedged a few of the remaining positions.

The breadth was good. Volumes were more than average, with advancing volumes  much higher than declining volumes.The candle was bullish and recorded a new high for the rally from March 2009.  The rising wedge shown on the line chart has resistance at 5495.The candle charts show a resistance of 5551. New support cemented at 5426-5431.

Half Hourly Chart

A broadening triangle seems to be forming on intraday charts but the difference in the swing highs and lows is very marginal.The shape that best captures this pattern is that of a megaphone. However, the charateristics of the broadening triangle seem to be adhered to.

"  The classic technical analysis text by Edwards and Magee characterizes a broadening top as a market that lacks intelligent sponsorship. It is one in which the public is being whipped around and driven this way and that by rumors. As such, volume during the broadening top pattern tends to be irregular. During some rallies volume may expand, but during others it tends to be tepid. The same pattern applies on pullbacks. Because it is so unpredictable, the broadening top pattern is extremely difficult to trade. There is no clear breakout to either the upside or downside edge of the pattern." 

The heading for the broadening top on one of the sites is,  

WHEN YOU SEE A BROADENING TOP, THE MARKET WILL EVENTUALLY DROP

Prudence would require booking some profits and hedging long positions.


Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 9th August, 2010

Weekly Chart

Though the candle for this week is a bullish candle and the Nifty made a new high , the action was almost within the range of 5349-5477 adding just 10 points on the upper end. The volumes  As seen on the weekly chart Nifty has cemented support at 5349 since last four weeks. This becomes a crucial decider in defining further trend. Till this level is held Nifty will  attempt to move higher.

Daily Chart

Chose to analyse the Line Chart instead of the OHLC charts . Line charts  put it across simply, clearly . After going through the noise in the OHLC charts,  Line charts feel  like a breath of fresh air. Just a glance tells you  that, in the run from 4786 ,  the Nifty has taken  three breaks, shown by the blue dotted  lines,  to catch up it's breath. The continuation after rest time has been with weakening vigour. Rests are getting more frequent.The  run up after the first lap, which ended at 4366, has formed a rising wedge shown in green.

The rising wedge is a bearish pattern that begins wide at the bottom and contracts as prices move higher and the trading range narrows. Volumes fall as the wedge matures. Volumes have been falling since the first peak made on 21st June. This is in line with the pattern requirements. The support on the lower trendline of the pattern is at  5412.Resistance on the upper trendline is at 5491.



The two stages where Nifty took rest is at  5235 and 5367. If the rising wedge breaks down as anticipated, Nifty will seek to stop the slide  at the previous rest zones of 5367  and  then 5235, hoping to garner strength to rise again. After all  no one likes to fall !

Cushion available at 5402- 61.8% retracement ( rise from 5349-5487 ),  20 dema -5399 , 5349-solid cushion on OHLC charts shown on weekly charts and 50 dema -5317.

Hurdles at  5472-5487-5522.


Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com