Nifty Weekly Technical Update for week ended September 18th, 2009.
Nifty opened strong during the week and maintained is upward journey and closed at highest point of the week. This shows clearly that bulls are in control of the market but it appears from the chart that the bulls have exhausted at-least for the very short period.The movement of nifty during the week was as anticipated and also as predicted. So we did not have any surprise action during the week. Nifty is maintaining itself above 15 day low EMA which is at 4977 which is clearly giving an indication that we are still in a uptrend and evey fall should be taken as an opportunity to go long. During the previous week nifty has taken support exactly at 15 day low EMA on previous week Friday and this week Monday onwards nifty has started to move up and made a new high. As I have been saying for the last seven months the 15 day low EMA has been acting as a good support level and it has been breached only twice and both the occasions’ nifty has rebounded with vengeance. So the trend to turn weak the nifty should close below 15 day low EMA decisively at-least for one week. So keep a watch on the same. One of the symptom which has been a concern for the last few months is that volumes have not bee supporting the break outs and this week was also not an exception. The rise for the current week was also was on low volumes indicating that majority of the players are now supporting the rise or valuations.
As per Fibonacci we have just completing 7 months and now we are into the 8th months. And as per Fibonacci we have chances of market correcting at the end of the eight month or just after completing it. So we have to be watch full.
It may be noted that any breach of 4700 should be taken as an opportunity to come into cash no matter what the stock is as it will signal the end of the current bull run. Currently good support appears to be at 4900. In my view we should start booking profit once 4900 is violated.
Positives for the market
• Nifty is still above the 15 day low EMA and 50 day EMA.
• DMI is moving up on weekly charts.
• The trend line of the rise is still intact.
Negative for market.
• -ve divergances still exists in oscillators – ROC, RSI, Elder bull ray
• Volumes are not still increasing.
• DMI is moving down on daily charts giving an indication that bulls are becoming weak.
Elliott wave analysis:
Last week I have clearly indicated the wave structure and there appears to be no change to my wave structure so nothing new to mention in this week. As per elliotte wave structure I have given target of 5195 and 5520 and both targets are yet to be attained and we have chances of seeing at-least 5195 in near term if it is taken out then we have all chances of nifty moving towards 5520. during the week the high made by nifty was 5152 which is just short of the 5195 by 40 points we have to see whether it will be attained or not. But in my view we have all the chances of seeing 5195. so better watch out.
Directional Momentum Index:
Nifty opened strong during the week and maintained is upward journey and closed at highest point of the week. This shows clearly that bulls are in control of the market but it appears from the chart that the bulls have exhausted at-least for the very short period.The movement of nifty during the week was as anticipated and also as predicted. So we did not have any surprise action during the week. Nifty is maintaining itself above 15 day low EMA which is at 4977 which is clearly giving an indication that we are still in a uptrend and evey fall should be taken as an opportunity to go long. During the previous week nifty has taken support exactly at 15 day low EMA on previous week Friday and this week Monday onwards nifty has started to move up and made a new high. As I have been saying for the last seven months the 15 day low EMA has been acting as a good support level and it has been breached only twice and both the occasions’ nifty has rebounded with vengeance. So the trend to turn weak the nifty should close below 15 day low EMA decisively at-least for one week. So keep a watch on the same. One of the symptom which has been a concern for the last few months is that volumes have not bee supporting the break outs and this week was also not an exception. The rise for the current week was also was on low volumes indicating that majority of the players are now supporting the rise or valuations.
As per Fibonacci we have just completing 7 months and now we are into the 8th months. And as per Fibonacci we have chances of market correcting at the end of the eight month or just after completing it. So we have to be watch full.
It may be noted that any breach of 4700 should be taken as an opportunity to come into cash no matter what the stock is as it will signal the end of the current bull run. Currently good support appears to be at 4900. In my view we should start booking profit once 4900 is violated.
Positives for the market
• Nifty is still above the 15 day low EMA and 50 day EMA.
• DMI is moving up on weekly charts.
• The trend line of the rise is still intact.
Negative for market.
• -ve divergances still exists in oscillators – ROC, RSI, Elder bull ray
• Volumes are not still increasing.
• DMI is moving down on daily charts giving an indication that bulls are becoming weak.
Elliott wave analysis:
Last week I have clearly indicated the wave structure and there appears to be no change to my wave structure so nothing new to mention in this week. As per elliotte wave structure I have given target of 5195 and 5520 and both targets are yet to be attained and we have chances of seeing at-least 5195 in near term if it is taken out then we have all chances of nifty moving towards 5520. during the week the high made by nifty was 5152 which is just short of the 5195 by 40 points we have to see whether it will be attained or not. But in my view we have all the chances of seeing 5195. so better watch out.
Directional Momentum Index:
DMI is has moved from around 27.48 to 27.04 after giving a positing buy indication i.e. movement of +D1 over –D1 and also +D1 is moving down and –D1 is moving up indicating that bears are slowly becoming active. After moving above 30 DMI has again moved below 30 this is not a good news for bulls. It is clearly giving an indication that even though bulls have upper hand now they are clearly loosing ground.
Pivot point analysis:
Pivot point analysis:
Nifty has moved exactly as per my last week’s indication. Nifty moved above 4981 pivot point and then rose and moved above the R1 and also R2. But for the current week the pivot is at 4080 and nifty is above it indicating strength but as nifty is showing some weakness we might see nifty moving towards pivot of S1. for the current week the range appears to be beween 5007 and 5214. if nifty fails to move above 5175 during early part of the coming week then we have all the chances of seeing 5080.
Turtle Trading:
Turtle Trading - 20 day Phenomenon (gave buy indication at 4743)
Current trend – buy
Go long above – in buy mode
Square off - 4921
Go short below: 4895
ATR at 85
M.Sri Mahidar
Sunday 18th October 2009 Time 7:11:20 PM IST.
Trend is friend
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