Reigning the Bank Nifty 17th May, 2011

 Daily Chart

Daily Chart II

An Inside day pattern after an Outside day pattern. The outside day pattern  came after a very short term downtrend and encompassed three day's trading range,indicating short term sentiment could change. However, today's Inside day shows the bulls have already exhausted themselves and the upside momentum has waned.

The pennant forming after a downtrend also indicates that the downtrend may resume after it breaks out from the pennant.

Trading below the 200 dema also shows weakness.All short term demas --5,10 and 20-- are bearishly aligned with each other and the 50 dema.

The fall from 11978 to 10677 took 9 days and the recovery from 10677 has already consumed 7 days  with just  40 % recovery. The technicals are therefore weakening once again indicating the fall may resume.Supports and resistances marked on the charts.


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Lakshmi Ramachandran
www.vipreetsafetrading.com

S&P 500 update 16th May 2011

 Weekly Chart

Weekly charts show a bearish candle which is a near doji with a long upper shadow. The candle also formed an Inside day. Oscillators exude weakness after showing negative divergence.The trendline resistance at 1374 may prove difficult  to cross for the time being.

 Daily Chart

Daily charts too formed an Inside day which would be bullish for the S&P500 as per historical evidence. Read post of 18th March --   http://vipreetinvestments.blogspot.com/2011/03/s-500-update-18th-march-2011.html

The pennant broke on the down side as mentioned in my post of 12th May. Support comes at 1332. If held, then the Inside pattern magic may get the S&P500 to rally once again. Keep a strict stop of 1329 on longs.


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Lakshmi Ramachandran
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Midday Nifty

 Half Hourly Chart

 Nifty moving in a tight range. Immediate supports on pink,blue and green trendlines at 5505-5480-5470.Action is weak and should break down.

Tick Chart

Tick chart makes it more clear with a lower high lower low

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Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 16th May 2011

Daily Chart

 Daily Chart II

The Nifty reacted to political news and rallied on Friday but reacted after briefly crossing the earlier highs of 5593.The pattern formed is an outside pattern.This is within a bear flag and which could also be the right shoulder of the bearish head and shoulder pattern.The necklines are at 5474  and below that the larger head and shoulder neckline is at 5362.The only point which goes to the bulls here is the necklines are upward sloping. Downward sloping necklines are more bearish as the show lower lows.

Crossing the resistance line of the bear flag at 5610 will find resistance at 38.2% fibo level-5622,
200dema-5624 , and the 50 dema -5655.

Half Hourly Chart

Half hourly charts depict the same bear flag and bearish  head and shoulder patterns discussed on daily and weekly charts ( you may read the weekly post here http://vipreetinvestments.blogspot.com/2011/05/reigning-nifty-weekly-update-14th-may.html ).

The pullback action from lows of 5443 adhere to all bear flag requirements :

• appearance after a downtrend
• retracement of the downtrend during the formation of the bear flag is very "slight"
• the pullback does not make new lows and is usually well channeled thus appearing like an upward moving channel or a parallel

The break in all possibility therefore, should be down with a move of  450 points from the point of break down.


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Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning the Bank Nifty 16th May,2011

 Weekly Chart

The Weekly candle formed an Inside Day showing indecision.The upper and lower breakout points are 11543 and 10677. The red uptrendline from 2009 lows has been held once again on closing basis.Support on this trendline now comes at 10955.Crucial support at 9634 from where the next leg up  can start for  the flag pattern to take shape.The 38.2% retracement level of rise from 2009 low is around 9500.

 Daily Chart

Daily charts show the week's action mirrored the earlier week  but within a smaller range which is forming a pennant with resistance at 11170 and support at 10866.The right shoulder, of the head and shoulder bearish pattern with the green neckline, too may be forming. Crucial support on the neckline is at 10703.




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Happy Trading !!
Lakshmi Ramachandran
www.vipreetsafetrading.com