Update: NIFTY forming a Head & Shoulder Pattern?
A volatile session for NIFTY today mostly due to closing of positions on Friday as people don't want to take risk home over the weekend. The Head & Shoulder Pattern formation is looking better than yesterday. Confirmation would be when it drop below the neckline. Even after dropping in a typical pattern, it comes back to touch the neckline from below (neckline acts as resistance) providing opportunity to short again. We just need to wait and watch for the formation to be confirmed. Also, the RSI is still not in the oversold territory confirming the possible downside atleast to 5175 before any kind of short-lived bounce-back
Thursday, February 24, 2011
NIFTY forming a Head & Shoulder Pattern?
NIFTY may be in the process of forming a Head & Shoulder pattern as shown. It seems like the neckline of the pattern would be broken around 4900 leading to the target 500 points below at 4400. That also would complete a 30% correction from the market top of 6300. 4400-4500 is also a good support zone as shown. Also, currently the RSI on daily chart is not in the oversold zone, which points towards more fall in NIFTY before there is a temporary bounce back.
Opinion: If market breaks 5175, open new shorts for the first target 4900 and below that 4400-4500 would be the next. Only thing that can reverse the fall pre-maturely would be the Macro-economic situation in terms of turmoil in North Africa and Middle East.
Sunday, February 13, 2011
Update - NIFTY in downtrend - Reversal Pattern
Nifty formed a bullish Morning Star pattern on Friday which shows a reversal. Next resistances should be 5400, 5550, 5670, 5780.
Monday, February 7, 2011
Update - NIFTY in downtrend - Consolidating now
NIFTY is still holding the support between 5350-5400. Its expected to consolidate near this level.
Thursday, February 3, 2011
Update - NIFTY in downtrend
As expected Nifty took support around 5400 and bounced back but the pain may not be over as it might retest 5400 again. Stay Cautious. Call would still be the same to buy in small chunks near the 5400 level.
Wednesday, February 2, 2011
Update - NIFTY in downtrend
Day Range 5415 - 5505; Strong support near 5400. Re-iterating same view as below.
Monday, January 31, 2011
Update - NIFTY in downtrend
Nifty opened at 5458, went down to 5430 and recovered to 5512 before closing at 5505. Nifty seems to be bottoming out near 5400 and this would be a good buying opportunity (Inverted Hammer formation). But there is always a fear or bad global news from Europe or the US, which could lead to breaking the support but as of now it seems to be holding on to the support and looking to go higher.
Sunday, January 30, 2011
NIFTY in downtrend
Nifty started rising from 2225 level in March 2009 and rallied to its top of 6340. Considering the Fibonacci retracement for Nifty - 23.6% retracement falls at 5370 which is very close to the support shown in the chart; 38.2% retracement falls at 4768 which is again near to its major support.
Fundamentally - The government is still not clear how it would tackle the persistent Inflation. Strong Dollar would limit the FII inflows. Some frauds in the previous few months are also inhibiting investors to get into the market at this time.
Fundamentally - The government is still not clear how it would tackle the persistent Inflation. Strong Dollar would limit the FII inflows. Some frauds in the previous few months are also inhibiting investors to get into the market at this time.
Opinion: Buy Nifty in small chunks as it is falling and gets near 5370. If it breaks 5200, its a good candidate to short for a target of 4800.
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