Nifty weekly Technical update for week ended 21st June 2009

Nifty Weekly update for Week ended 6th June 2009

Nifty Weekly Update for week ended June 6th, 2009.
As has been indicated by me the nifty has opened on a positive note and stayed there and slowly moved up made a high of 4638 and there after corrected. It appears that nifty is finding very tough to 4600 it has moved above the level twice and failed to closed above 4600. So the 4650 appears to be a good resistance level as of now. Unless and other wise nifty closes above 4650 longs should not be initiated.4650 happens to be high of august 2008 from where market tanked to yearly lows. By the completion of the week nifty has completed 13 weeks of continues rise and there are very good chances for nifty to correct from there levels as the time period has come. It may also be noted that all the major oscillators like ROC,RSI, Elder bull ray etc. are showing –ve divergence for the last two to three weeks and as the time period has also come there are good chances of nifty correcting at-least for 2-3 weeks. Any move below the low of the last week i.e. below 4450 will trigger a fall which has all the chances of moving towards 4200 levels. All these are pointing towards the imminent correction in near term. If nifty closes the coming week with a green candle then we has all the chances of nifty moving up for at-least another seven weeks to complete the next Fibonacci of 21. All major stocks line RIL,ONGC, Rcom, HDFC, ICICI bank, Infosys technology, TCS are showing –ve divergence and are also appearing to be extremely week indicating that we have all the fair chances of moving down from current levels not by small margin but by bid margin. If the correction sets in for the entire rise from 2539 to 4639 then we have chances of seeing min correction of 23% of 2100 points so a fall of 483 points from 4639 so a minimum target of 4156 so a fall of 400 points from current levels appears to be imminent. So it seems that we can short nifty with stop loss of 4650.

It appears from the chart that nifty might have completed five waves up move and we have all chances of nifty correcting. Any move below 4500 will trigger a fall and first indication of reversal. so 4500 should be a level to be watched for shorting nifty.

Directional Momentum index
As indicated in my last weeks update bulls have taken firm grip on the market. DMI has moved from 47 to 53 levels indicating that bulls are still in control of the market. As the DMI is above 40 we can see a huge volatility in the market with upward bias in the market. It may also be noted that DMI is at very high point. The High point reached by DMI during the entire bull market is 52. When ever it moved to 45-49 levels it has reversed the trend correction was witnessed. So it is pointing towards a correction and wait and watch for nifty to give an indication.

Turtle Trading: - 20 days phenomenon;
Current Indication – buy Generated at 2850
Longs may be closed on movement below – 4092
Shorts may be initiated on close below 3534
ATR is at 135.

Individual stocks:
Television 18 - Rs.155

TV eighteen appears to be a very good stock to be acquired technically. The very very heavy volumes suggests that we have all the chances of see the stock moving substantially from current levels. Even though the PE appears to be very high at current price the volumes are giving an indication that the stock has very good upside potential. Stop Loss:125

M.Sri Mahidar
Sunday 7th June 2009 8.00 PM IST
Trend is friend