Nifty Weekly Technical Update for week ended August 29th, 2009.
The performance of nifty during the week is nothing but spectacular considering the state in which the nifty was at the end of last week technically. Nifty opened with gap up and continued to move up every day of the week indicating some strength in the market. One of the remarkable feature of the up move during the is that nifty was able to move up and close above it high of 4731 at 4732 which is very very powerful bull strength. But there is one big draw back nifty is moving up with heavy –ve divergence in oscillators indicating that the up move may be strong but the under tone is weak and when the market reverses it would be in a big way. There is –ve divergence in daily and weekly RSI, ROC clearly indicating that the market lacks strength and might reverse any movement. One of the markeble feature of weak market presently is that the DMI which shows the direction has strength or not is still moving down even though market has made a new high indicating that the movement lacks directional strength. The market is still above the 15 day EMA giving an indicating that we should go long on every fall. The 15 day EMA is at 4586 so till the market moved below this the trend is up and if it moves down the 15 day EMA then the trend becomes down and we should reverse the strategy of going short on every raise. The market has been finding support at the 50 day EMA and reversing from there to make a new high during the last two months, the 50 day EMA is at 4430 any movement of nifty below 4430 will confirm the strength of the bears and fall of the market will intensify on movement of nifty below 4430.

It can be clearly seen in the chart above that there is huge –ve divergence in the oscillators three power oscillators i.e. MACD, ROC, RSI giving a clear indication that the undertone of the market is very weak. This gives a clear indication the our longs should be strightly protected or we should start booking profits on every raise.

It can be seen from the above chart that nifty is in a trend from last six months and that the trend line for the same is drawn from the low of 2600 to last weeks high so the current support is at around 4500 levels the trend line was not broken till now and any breach of 4500 will not augur well for the bulls as bears will take center stage from that level onwards. So any breach of 4500 will be a significant event to watch out for nifty in the coming weeks.

Directional Momentum Index:

DMI is has moved from 15.19 to 13.62 has just given a sell singal i.e. +D has moved above -D. The downward movement of DMI is a clear indication of lack of direction. Wait for the DMI to move above 20 to give an trending indication. So keep a close watch on DMI as it is expected to give a clear indication of direction in coming weeks. On weekly chart the DMI is in buy mode and is moving down indicating the bulls are loosing ground. Even though +D line is above –D line the distance between the same is narrowing indicating that bulls are losing ground.
Pivot Point Trading Strategy:
Pivot has worked very well last week where in nifty is moved above the R2 indicating strength for the week. For the coming week the pivot is at 4670 any break of the same will pave way for 4598 and 4463. So for the coming week the nifty range should be any where between 4463 and 4805.

Turtle Trading:
Turtle Trading - 20 day Phenomenon
Current trend – buy (but my view is to go neutral)
Go long above - 4731
Square off - 4353
Go short below: 4353
ATR at 123

M.Sri Mahidar
Sunday 30th August 2009 Time 8:33:31 PM IST.
Trend is friend.

Weekly technical update 22nd August 2009.

Nifty Weekly Technical Update for week ended August 22nd, 2009.
Nifty appears to have stuck in a range bound market, this is clearly indicated by the movement of Directional Momentum Index (DMI). DMI is moving no where it just stuck between 14 to 16 indicating clearly that market is directionless. That is the reason why we are seeing on day up move and another day just reverse day. The best thing in this type of market is to stay our from trading and concentrate on the stocks which are technically sound. Market has this week on Friday again moved above the 15 day EMA indicating that bulls might have taken market into their stride and but still lack strength which is clearly indicated by the movement of DMI. Now we have to closely watch the movement of DMI when ever it starts to move up above 20 of 4 ticks in a day or two with –ve or +ve break out then we can see a big movement in the direction of the break out. In the last two years when ever DMI of nifty has come out of hibernation i.e. it has started to move up above 20 it has moved in the direction of the break out by at-least by 1000 to 1500 points. So you know what would is waiting for you a movement of at-least bare minimum 1000 points in the direction of break out. So keep a close watch on the DMI as it is going to give the strength of the market. Now from this week I would be discussion the technicals of nifty on daily charts, weekly charts and monthly charts to see the strength of the market in short term medium and long term. One point to be noted is that nifty is finding support at the 50 day EMA, during the last two weeks it has found support at 50 day EMA at-least four to five times. When ever it has gone near the 50 day EMA it heavy buying has come in which has taken the market past the 15 day EMA nifty is hovering between the 15 day and 50 Day EMA. Any breach of the 50 day EMA would be a significant event for the bears. 15 day EMA is at 4491 and 50 day is at 4375.

On daily charts nifty clearly lacks direction. All the oscillators are showing weakness, indicating that the market is in weak hands at-least for the time being. MACD and TRIX are weak but are yet to move blow the zero line to give strength to the bears. They are forming lower tops where as nifty is forming the reverse clearly indicating that market is in the weak hands but is yet to be confirmed by movement below the trigger line. RSI is still above 50 indicating strength for bulls even though its weak but it has to move below 50 to give some comfort to bears. It is hovering at around 50 to 55 for quite some time. So on daily charts nifty is clearly in the weak hands but is yet to be confirmed by the market. This gives us an option to look towards the weekly charts as to whether they are indicating any strength as of now.

On weekly charts it is giving strength to the bulls, this is the reason for the market to rise when ever it falls. As daily chart is showing weakness where as the weekly charts are showing some strength for the bulls. So we might be seeing more intense fight between the bulls and bears. MACD is in a buy mode and the average and trigger line are kissing each other and are about to give a sell signal but not given yet. TRIX is showing strength but its not been raising for the last two to three weeks indicating clearly that bulls lack strength. The distance between the average lines is narrowing indicating that it might give a sell signal we have to closely watch the TRIX on weekly charts as any sell indicated by same will result in nifty going down heavily and inversely if it starts moving up then market will also do the same. On weekly basis RSI is flat at 60 for the last five to six weeks indicating clearly that under tone for the bulls is weak or bulls are slowly loosing ground. On weekly charts there is –ve divergence in nifty indicating that bulls are clearly loosing ground. It may be noted that weekly RSI when ever it has moved above 60 and towards 70 and then can downs below 60 the markets have corrected in a big way. This has happened at-least six times from 2003 onwards. This time also nifty has moved above 60 towards 70 reached 67 and then now at 59 does this indicates some thing? One point to be noted is that on weekly charts nifty is showing diminishing volumes for the last five weeks indicating that what ever is happening is on very less volumes. But one thing which has happened during the last week is that nifty has formed a hammer indicating bulls have gained upper hand at-least for the time being. So keep a close watch on the weekly chart as of now in next two to three weeks we might get clear signal from the market on weekly charts which will be a significant event and would pave way for the bigger movement of the market in either direction. So keep a close watch as next two to three weeks will pave way for a huge profit opportunity.

On monthly charts, there is some divergences on the oscillators it self, while TRIX is showing strength for the bears, RSI and MACD has indicating strength for the bulls. MACD has given a buy signal in the month of July 2009. MACD has given a buy signal from below zero and is moving up. This is extremely bullish sign, which indicates that market might move up substantially in longer term. Previous to this MACD has given a buy signal in 2004 and was rising and in buy mode up to march 2008 where sell signal was given and subsequently to moved down below zero and now has given a buy signal below the zero line and moving up. As on monthly charts the buy or sell signals, indicate a significant change in the market sentiment in longer term. As MACD has just give buy mode and moving up, and it is only second time in last five years we can safely assume that we might be heading for good days in the markets in the months or years to come.

So now we can safely assume that on daily charts its indicating weakness, on weekly charts its indicating strength of bulls but weakening and on monthly charts it extremely bullish indicating that once the short term picture turns bullish we can see the markets moving significantly. The charts are indicating that the correction which might happen in the market in the coming week or month is going to be short lived and once the correction if it happens is over we can have fair chances of market moving significantly up to higher levels.

Directional Momentum Index:

DMI is has moved from 14.20 to 15.19 and has just given a sell singal i.e. -D has moved above +D. The downward movement of DMI is a clear indication of lack of direction. Wait for the DMI to move above 20 to give an trending indication. So keep a close watch on DMI as it is expected to give a clear indication of direction in coming weeks. On weekly chart the DMI is in buy mode and is moving down indicating the bulls are loosing ground. Even though +D line is above –D line the distance between the same is narrowing indicating that bulls are losing ground.

Pivot Point Trading Strategy:
As per this strategy the nifty is just above the pivot point and it has chances of moving towards 4613 and 4698 in the coming week. Any failure of nifty to move above 4613 will pave wave for nifty to move towards 4408. So the range for the market in the coming week is going to be around 4288-4698.

Turtle Trading:
Turtle Trading - 20 day Phenomenon
Current trend – Neutral
Go long above - 4731
Square off - NA.
Go short below: 4353
ATR at 123

M.Sri Mahidar
Sunday 23rd August 2009 Time 8:40:45 PM IST.
Trend is friend.

Nifty weekly update for week ended 15th Aug 2009

Nifty Weekly Technical Update for week ended August 15th, 2009.
As anticipated nifty opened down moved further down in the beginning of the week and suddenly unanticipated it made a very good reversal on Wednesday afternoon and there after started to move up marking a spectacular recovery. Nifty moved below the 15 day EMA and then taken support near the 50 day EMA at around 4350 and then made a spectacular recovery and moved above the 15 day EMA eventually. As nifty is above the 15 day EMA the strategy should be go long on every fall. 15 day EMA is at 4529 till it is broken you should be long on every fall and if it is broken in the beginning part of the week then we can short on every raise. So the pivotal value will be for the current week will be at 4529, but nifty has taken support at the 50 day EMA and then moved up very swiftly so till 50 day EMA is respected we will have no problem for bulls if it is broken then bears will take charge in a big way. So keep a very close watch on 15 day and 50 day EMAs as any violations of the same will have a big impact on the indices. Nifty this time also finding it difficult to go past 4600 decisively indicating further that market is not so strong as it appears to be. So it appears that 4600-4750 appears to be no-trading zone for the time being. Any break of nifty of 4750 decisively and with heavy volumes is a clear indication of bull move but we have a very huge Fibonacci resistance at 4850-4900 where in 61.8% resistance of total fall from 6357 to 2227 is there. So any break of 4900 is surely very very good news for the bulls and on the break of 4900 nifty will break away to a major bull territory. This time also the raise of last two days is on less volume putting doubts on the upward movement of the indices. We are witnessing a very unique phenomenon during the last one and half month as the both raise and fall are not associated with heavy volumes giving a clear indication that market is undecided and which every direction it moves it would be on a very big scale. So keep a very very close on volumes when seeing for clear break out and also keep a close watch on DMI which give the strength of the trending market. If you have been following my writing I have indicated that we have completed 5 months and 21 weeks of raise and we should now patiently for market to give a clear indication and just trade/invest in that direction. So keep you fingers crossed. The bias still appears to be down till 4850 is taken out decisively.

In the above chart it is not clear what nifty is forming, either a flat of an expanding triangle. Flat I have explained two to three weeks back in this case we might see nifty correcting after reaching around 4650-4750 levels to wards the 3900 levels. There appears also another option of expanding triangle as has been indicated above and in this case the volatility should increase as we progress towards completion of the same. In this case we might move toward 4700-4800 levels the fall very swiftly towards sub-3900 levels and then there after move up toward 4800 again to correct from there. So we are yet not clear what pattern the indices are forming so we have to keep a close watch on the 50 day EMA or 4400 levels which happens to be a crucial decider for nifty. It appears that in a week or two nifty will surely give a clear directional indication. If we are forming a expanding triangle then it might take another month or two to complete the same.
Directional Momentum Index: DMI is has moved from 17.10 to 14.70 and has just given a buy signal i.e +D has moved above -D. The downward movement of DMI is a clear indication of lack of direction. Wait for the DMI to move above 20 to give an trending indication. So keep a close watch on DMI as it is expected to give a clear indication of direction in coming weeks.
Pivot Point Trading Strategy

It can be seen from the above that nifty is above the weekly and monthly pivot indicating that bulls are still in charge of the market. So as per this strategy, the trading levels of nifty are between 4259 to 4680/- in the coming week.

M.Sri Mahidar
Sunday 16th August 2009 Time 7:27:45 PM IST.
Trend is friend.

Nifty weekly update for 7th August 2009

Nifty Weekly Technical Update for week ended August 8th, 2009.
Nifty opened on a strong note on Monday move up above 4700 closed for one day above it and then started to move down and the fall accelerated on last two days of the week finally close at the lowest point of the week. The Close at the lowest point of the week is indicating towards the weakness of the market. All through the movement during the last two weeks the up move was associated with higher volumes and the down move was associated with heavy volumes suggesting that at higher levels profit booking has taken place and that the market sentiment is not favor of bulls and was shifting in favor of bears. The movement during the week has confirmed that 4700 is the formidable resistance which may not be easy to be broken as nifty has failed to pierce it twice in the last two months. And also the nifty attempt twice has given an indication of a probable double top and reversal seems to have just started. If double top has indeed occurred then we have to see a very very big fall not seen in the last five months. Another point which I have been discussion for last so many weeks is the no of weeks and months of raise. For the week ended July 31st nifty has completed 21 weeks and also five months of raise. Both 21 and five are Fibonacci and the nifty has started to fall after exactly the Fibonacci months and weeks. So we cannot take the fall of the last week lightly. Another point to be noted is that the market has completed double top at exactly the completion of the time period. The time period and the patterns are pointing towards probable reversal in the markets. It appears that reversal has happened quietly and when majority were talking about probable end of the bear market and nifty touching 5200 levels or so.

Nifty has on Friday moved below the 15 day EMA indicating that for the short term the market has turned weak and now the strategy should be short the market on every raise but remember one thing if and if market move above 4536 then the strategy should be reversed.
On weekly chart nifty has closed below the last weeks open indicating that weakness has set into the market and it can reverse only on very good positive development. Any break of 4400 will open gates towards last month’s low of 3900 levels. The MACD on weekly charts is about to give a sell signal if given will give an indication of weakness on weekly charts. In weekly charts also the weakness is going to set in. Nifty has exactly closed at 5 weekly EMA and any break of the same will open gates on down sides weekly trix is buy mode indicating that the market are showing still showing some strength. TRIX on weekly charts at the same levels as that of January 2008 and has just started to move down by not give a sell signal. The downward movement is indicating that we might has see top but still not confirmed by TRIX.

It can be seen from the chart below that there is a huge divergence in the both MACD and RSI. In case of RSI there is divergence both on daily and weekly charts indicating that all is not well with the market. This is giving an indicating that although indices are moving up they lack momentum. Such divergences have earlier occurred in Dec 2007 and January 2008 and you know what happened after that markets tanked heavily. So be cautious will every raise, as every raise gives an opportunity to either short or book profit.

Directional Momentum Index:

DMI is at 17.10 and has just given a sell signal i.e –D has moved above the +D. Wait for the DMI to move above 20 to give an trending indication. So keep a close watch on DMI as it is expected to give a clear indication of direction in coming weeks.
Pivot Point Trading Strategy

As nifty is below the weekly pivot indicating weekness. As long as nifty stays below the weekly pivot we have chances of seeing 4386. One point to be noted is that nifty has struggled to move near the yearly pivot of 4856 indicating weakness and we might see further down sides. In the coming week the range appears to be 4290-4558.
M.Sri Mahidar
Sunday 9th August 2009 Time 8:20:45 PM IST.
Trend is friend.