Nifty Weekly Technical Update for week ended September 2nd, 2009.
This week was a truncated week with only three trading days possible. During the week nifty closed on a positive note. After failing to close above 5000 for the previous week this week nifty closed above 5000 for three consecutive days indicating that the bulls have successfully conquered 5000. Generally it is considered that any close above the resistance levels for three consecutive days is considered as positive sign. As 5000 is a psychological level and as nifty has closed above it for three consecutive days we cam safely assume that we might have conquered it. So all our stop loss should be placed around those levels probably around 4900 levels. Previous week nifty has formed a doji indicating indecisive ness and this week if has firmly moved up showing direction for the market. so the low of the previous week 4904 should be a formidable stop loss for any longers in the market any move below that level should ring alarm bells and we should be cautious. Nifty is still quoting above 15 day EMA low which is at 4897 and till nifty is above that level there is no problem for the bulls and once it moves below that it should ring alarm bells in the ears of bulls. As during the entire run from March lows nifty has gone below that only once and that too after the budget. So the 15 day EMA low can be taken as a good support level for nifty. As far as Fibonacci is concerned we are into the seventh month and we will be entering into 8th month in and around diwali from where we should become cautious as by the end of 8th month or during the end of 8th months generally makets reverse. Considering this we can safely assume at this point of time is that we might has a very good diwali this year which is complete reversal of fortunes from the last diwali where the market was down and out. In my view we might see market correcting from the second week of November. So once this month ends we should start booking profits on every rise. DMI which is one of my favorite which clearly give the strength of the current move has moved upwards 31 indicating that bulls are gaining upper hand and we might see the markets going into frenzy mood in the coming weeks. On weekly charts also DMI has moved from around 28 to current 31 indicating that bulls are gaining upper hands.
In weekly charts are showing good strength for medium term. In weekly charts, during the last two weeks the 50 week EMA has moved above the 100 week EMA which is clearly indicating the market is gaining strength. The previous time the 50 week EMA went above the 100 week EMA was in September 2004 when the nifty was at 1600 and there after nifty has risen to 6357. And currently 50 week EMA has moved above 100 week EMA showing the strength of bulls. But do not take it as a base that nifty will blast away from these levels. but it is showing the strength of the current move.
Positives for the market
• Nifty is still above the 15 day low EMA
• DMI is moving up in both daily and weekly charts and the trend in favor of bulls.
• 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.
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. So watch accordingly
Directional Momentum Index:
This week was a truncated week with only three trading days possible. During the week nifty closed on a positive note. After failing to close above 5000 for the previous week this week nifty closed above 5000 for three consecutive days indicating that the bulls have successfully conquered 5000. Generally it is considered that any close above the resistance levels for three consecutive days is considered as positive sign. As 5000 is a psychological level and as nifty has closed above it for three consecutive days we cam safely assume that we might have conquered it. So all our stop loss should be placed around those levels probably around 4900 levels. Previous week nifty has formed a doji indicating indecisive ness and this week if has firmly moved up showing direction for the market. so the low of the previous week 4904 should be a formidable stop loss for any longers in the market any move below that level should ring alarm bells and we should be cautious. Nifty is still quoting above 15 day EMA low which is at 4897 and till nifty is above that level there is no problem for the bulls and once it moves below that it should ring alarm bells in the ears of bulls. As during the entire run from March lows nifty has gone below that only once and that too after the budget. So the 15 day EMA low can be taken as a good support level for nifty. As far as Fibonacci is concerned we are into the seventh month and we will be entering into 8th month in and around diwali from where we should become cautious as by the end of 8th month or during the end of 8th months generally makets reverse. Considering this we can safely assume at this point of time is that we might has a very good diwali this year which is complete reversal of fortunes from the last diwali where the market was down and out. In my view we might see market correcting from the second week of November. So once this month ends we should start booking profits on every rise. DMI which is one of my favorite which clearly give the strength of the current move has moved upwards 31 indicating that bulls are gaining upper hand and we might see the markets going into frenzy mood in the coming weeks. On weekly charts also DMI has moved from around 28 to current 31 indicating that bulls are gaining upper hands.
In weekly charts are showing good strength for medium term. In weekly charts, during the last two weeks the 50 week EMA has moved above the 100 week EMA which is clearly indicating the market is gaining strength. The previous time the 50 week EMA went above the 100 week EMA was in September 2004 when the nifty was at 1600 and there after nifty has risen to 6357. And currently 50 week EMA has moved above 100 week EMA showing the strength of bulls. But do not take it as a base that nifty will blast away from these levels. but it is showing the strength of the current move.
Positives for the market
• Nifty is still above the 15 day low EMA
• DMI is moving up in both daily and weekly charts and the trend in favor of bulls.
• 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.
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. So watch accordingly
Directional Momentum Index:
DMI is has moved from around 29 to 31.50 after giving a positing buy indication i.e. movement of +D1 over –D1. The rise of DMI after positive break our is a clear indication that bulls have gained upper hand in the market and they might try all means to decimate bears. It has moved above 30 which is clearly giving an indication that we have all fair chances of nifty moving up.
Pivot point analysis:
Pivot point analysis:
Nifty is just above the week pivot point, till it is above 5051 we have chances of seeing 5142 in the coming week. If the weekly pivot point is taken out on down side then we have chances of seeing 4991. Any break of 4915 should alarm us and we should book our profits as early as possible. For the coming week we have range of 4900 to 5202.
Turtle Trading:
Turtle Trading - 20 day Phenomenon (gave buy indication at 4743)
Current trend – buy
Go long above – in buy mode
Square off - 4895
Go short below: 4577
ATR at 80
M.Sri Mahidar
Sunday 4th October 2009 Time 7:04:25 PM IST.
Trend is friend
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