Reigning The Nifty - 14th August , 2009

Half Hourly Chart

Daily Chart with Rising Wedge

Daily Chart

Yesterday's bullish hammer was proved very bullish with a big bull candle today. The Advance Decline was hugely in favor of the advances. The resistance of downtrendline from January 2008 highs was so very easily scaled and the target of 4625 given yesterday was almost reached at 4614. Volumes were low.

This fast run up should have left the market breathless and one needs to be cautious . The daily Oscillators have moved up once again but Macd yet to give a buy. The rising wedge is threatening with resistance at 4737. Only a decisive break above the upper trendline of the wedge will negate the bearishness of the wedge. I have redrawn the neckline of the head and shoulder which I have been showing for sometime.

The half hourly oscillators have reached overbought levels. Tomorrow is the last day of the week and I will review further after studying the weekly candle. Meanwhile trade light with strict stop losses as the trend can change frequently when approaching the strong resistance of 4731.
Supports and Resistance levels marked on charts.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 13th August , 2009

Rising Wedge in Line Chart

Rising Wedge

Daily Chart

Half Hourly Chart

Daily Chart

By today's action a bullish hammer was formed and the rising wedge target of 4378 was achieved. Strong support levels held though attempts to push down prices continued for most part of the day. However the close could not scale the upper trendline of the channel which offers resistance at 4475 for tomorrow. It is important to close above it else the possibility of testing lower trendline is high.The Daily oscillators are not indicating strength, the Advance Decline figure was marginally negative and volumes were below average.

The half hourly charts show the fall from 4731 in a channel and we have broken out of it today giving a technical target of 4625. The breakdown from the neckline did not last long and the recovery was with positive divergences in the half hourly oscillators.

The trend will turn mildly bullish once the 4510 level is overcome and sustained.Technically the low of the hammer should be strong support. Tomorrow's candle will tell us more.

The action since May 17th has formed a rising wedge which I have shown on line as well as candle charts . Line charts depict the formation much better. This has very bearish implications. The mild bullishness as of now should be a temporary pullback which should then culminate into a fall again breaking the rising wedge downwards for a target of 1200 points from point of breakout (high point 4731- low point 3537 = 1200).

Resistance and support levels are marked on the charts.


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 12th August , 2009

Half hourly Chart

Daily Chart

Today was an up day but the pullback was not very impressive.

• Volumes were low and the Advance Declines only marginally positive.
• Nifty broke above the upper trendline of the channel intraday but failed to close above it.
• It is the second consecutive day that 4500 levels where the 20 dema and the 200 period ema on half hourly charts is, is proving too difficult to climb.
• The daily oscillators have not done much today to change my view, though the Rsi 14 has moved above the 50 level. The intra day oscillators have corrected the oversold condition to some extent.
  
• The silver lining in the cloud is that the support around 4380-4400 held firmly for the second day.
• The half hourly chart shows a triangle formation indicating break could be in any direction, though since the lows are rising the break may be on the upside.
  

Nifty has formed a range of 4400 to 4510 in the last two days. A break from this range will give a 100 point move.Till this happens it will be difficult to trade .
The short term trend is down and one should look for oppurtunities to go short with a stop loss of 4600.

Resistance 4487- 4527-4565-4609
Supports 4420-4325-4287-4230


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 11th August , 2009

Half Hourly Chart

Daily Chart

Fall continues inspite of good global cues. What do we have in store?

The Daily charts signal weak markets. The 5dema has crossed below the 10dema. Stochastics has moved below 20 signalling oversold markets. RSI 14 is below 50 mark and Macd above zero line but in sell mode.The upper trendline of the falling channel proved strong resistance and Nifty tried unsuccessfully to stay above it. Unless we scale this trendline possibilities of testing the lower trendline gets stronger. But strong supports at 4380-4325 has to be contended with before reaching those levels. The 50 dema is at 4332.

The oscillators on half hourly charts have moved up from the oversold region showing positive divergence intraday, but have wilted by end of day. The rising wedge target of 4378 is very much achievable with momentum being on the downside. In case there is a pullback we may be forming the right shoulder of the head and shoulder pattern shown on half hourly charts with neckline at 4430. In case this plays out and the Nifty breaks the neckline we have a target of 4130.

We may expect profit booking once the target of 4380 is reached leading to a bounce. Look for oppurtunities to go short with a stop loss of 4600.


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 10th August , 2009

Daily Chart

Weekly Chart

Last week we had three targets on the upside to achieve.

• 4693 top of rise from 2539
• 4812 channel target shown on daily charts.
• Sloping channel target of 5200.

Nifty achieved the first target of 4693 with ease but the moment this was achieved it was a laboured attempt to move higher. Conviction was more towards a retreat than a rise.

Momentum

• Among the weekly oscillators RSI14 and Stochastics having started moving down after a negative divergence. Macd is yet to give a sell.
  

• Daily oscillators RSI14 and Stochastics have moved down after showing a negative divergence. Macd in sell mode after negative divergence.
  

• The Intraday oscillators are in oversold territory. Price ROC 12 has taken support at levels reached when nifty touched 3918 and is moving up.
  

Moving Averages are bearishly aligned on the intraday charts. Daily and weekly charts are bullishly aligned.

Bearish Price Pattern And Trendline Break

• Rising wedge on intraday half hourly charts is broken with a target of 4380.
• The breakout above the green trendline joining January 2008 highs and the post budget high of 4693 in June 2009 was proved false on a weekly basis.
  

Bullish Price Pattern

• Breakout from a bullish falling wedge formed on weekly charts giving a technical target of around 5100.
• Downward sloping channel breakout on daily charts with a target of 5225 negated as price below upper trendline of the channel.
  
• The bullish Inverse Head & Shoulders pattern has given a breakout with a target of 5205 has been negated as the breakout was false.
  
• A larger head and shoulder pattern with neckline around the 4700 levels. I havent shown this on the chart as of now.
  

Sentiment Indicators

• Advance Decline line moving down after negative divergence.
• Nifty futures at a discount .
  

Conclusion

Last week I expected a correction considering,

• The Nifty was near strong resistances at 4693-4788.
  
• The 700 point rise from 3918 had had no meaningful correction.
• The rising wedge on half hourly charts showed Nifty may be in for an immediate correction.

Well, the correction did come furiously on breaking the rising wedge. As of now,

• The short term trend is down while the intermediate trend is still up.
• 4421 is the earlier low and the 38.2% retracement level of rise from 3918 is at 4423 which should be strong support.
  
• Below 4421, Nifty has strong support at 4325-4380 levels. 50 Dema is also around 4327 levels.
  
• The intraday charts show an oversold condition.

The trendline joining March lows at 2539 and July lows of 3918, shown in green, offers support for the week at 4250 to 4325 for the week. Holding this trendline will keep the bullishness of the upmove alive. One can look for oppurtunities to go long keeping these levels as a stop loss.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com