Nifty movement during the week was very boring as nothing seems to have happened during the week and nifty moved nowhere. It was stuck in 100 point range from 5070 to 5180. This week also nifty moved or touched 5180 and then started to moved down and corrected. During the last one and half months this is the fourth time that nifty has failed to move above the 5180 level and all those times nifty has tanked immediately after testing the level, thus giving a clear indication that 5180 has now becoming a formidable resistance for the nifty. So it appears that unless and other wise nifty closes above 5200 no longs should be entered. Even if shorts are entered they should be closed on movement of nifty above 5200 level. Nifty is still maintaining above the 15 day EMA which is at 5085 and till it is above that level we can thing of entering long only and not short. If nifty moves below the 15 day EMA then we can thing of shorting nifty. Whole through the week nifty has taken support at the 15 day EMA at-least thrice thus giving us an indication that nifty is finding support exactly at the 15 day EMA so nifty is stuck between the 15 day EMA and 5180 any move on either side might result in nifty moving in that direction by at least 200 to 300 points. You are advised to trade accordingly. It is better to wait for break out on either side before initiating any trade.
On weekly chart nifty has failed to move above the previous weeks high indicating that the indices might be becoming weak. This weeks low is at 5051 any movement of nifty below that would result in violent fall in nifty so any move below will signal strength of the bears.
One of the noticing features of movement of nifty is that as nifty was trying to make a new up and make a high, Relative Strength Index (RSI) has been moving down and making a –ve divergence. RSI is not placed at 54 and any move below 50 would strengthen the bears.
It may appears to you that I want the market to go down, it is not the case all the technical indicators are pointing towards the same but market is not confirming the same. So we have to wait till the market confirms, till that time as is the case follow the trend.
Positive for nifty:
• It is still above 15 day, 50 day and 100 day EMA
Negatives for nifty:
• Volumes are increasing with the every fall
• Weekly MACD and TRIX have given sell signal.
• Huge –ve divergence between RSI on weekly and daily charts.
• DMI is moving down.
• DMI has given a sell signal – but DMI has to move above 20 to confirm the trend.
• Daily MACD and TRIX are in sell mode.
Elliotte wave analysis:
During last few weeks it has been indicated that, 5195 and 5520 are the targets which have to be broken, I have also indicated that if nifty fails to move above 5195 and then we have chances of nifty moving towards the low of November. It has gone near 5195 twice during last one week and thrice during last one and half months giving an indication the 5195 offers a formidable resistance. As nifty has once again failed (fourth time) to move above 5195 we have all chances of seen 4500 in near future.
Directional Momentum Index:
DMI is indicating directionless for the market. This week also the –D1 line is above the +D1 line and DMI is moving down wards, it has moved from 14 levels to around 12 levels during the weak which is clearly indicating that the market is directionless and calls should be taken only when DMI give an indication of strength in that direction. Till that time it is better for us to wait patiently. Even though market has moved during the week –D1 is maintaining above +D1 giving an indication that bears are still having slight upper hand but are failing to take control over the market, which is clearly indicated by the down ward movement of DMI.
Pivot Point Trading Strategy:
Last week, during the whole week nifty stayed above the pivot point and went near the week R1 of 5212 and then reversed towards pivot. For the current week Pivot is placed at 5117 and nifty is exactly placed at that level. Any move below that would open gates towards 5051 and there after 4986. and any move above it would pave way for 5182.
M.Sri Mahidar
Sunday 13th December 2009 Time 19.24 IST
Trend is Friend.
No comments:
Post a Comment