Nifty opened on weak note with –ve closing on Monday and there after bulls took charge of the market and on 23rd they took full control of the market where in nifty rose nearly 150 points there by decimating bears and nifty rose by nearly 150 points on that day and also followed it up on Thursday to touch a high of 5197 and there after closing at 5178 which happens to be highest closing after may 2008.After nearly two and half months nifty was able to move above 5180 and touch 5197 but it did not close above 5180, but closed at the highest point in recent times. I have been mentioning from last two to three months that nifty has formidable resistance at 5195 and till now nifty has not closed above that figure even though moved above it. It stayed above 5195 only for very short period of time but we should take that we have reached 5195. Any close of nifty above 5195 would indicate that nifty would make an attempt to touch 5520 balance is mentioned elliotte wave analysis below. One of the good news for bulls is that nifty has taken support exactly at 50 day EMA and then there after rebounded with vengeance to make a new high. This clearly indicates that bulls are still giving support to the market a the lower levels. During the week nifty has moved above 15 day EMA indicating that bulls have taken upper hand in the market giving an indication that all the fall should be taken as an opportunity to go long. 15 day EMA is at 5069 so till nifty is above this we would take every rise as an opportunity to go long. So trade accordingly
It can be seen from the above chart of nifty that nifty is continually making a higher low (indicated by blue arrows) this clearly indicating that bulls are still in control of the market. This phenomenon is clearly indicating that bulls are still in control of the market. Currently we have to wait for nifty/markets to make a lower low for confirmation of end of the up move and start of the bear phase till then we can safely assume that we bull run is still continuing. From the last few weeks I have been clearly indicating that the lower support line is giving good support for the market and this time also it has held indicating that this support line is very crucial for the bulls. The day it is broken it would confirm the down trend. So keep a close watch on the same. It may also be noted that 50 day EMA is offering very good support for the market for the last 10 months so this also forms a good support for the market so these are the two things which has to be keenly watched. The 50 day EMA is at 5002 and the support line is at around 4950. so these are the two levels which are to be closely watched.
As per Fibonacci we have completed 9 months and we are into 10th month of rise and generally speaking we should rise upto 13th month which happens to be March 2010. Strightly speaking nifty should be raising upto March 2010. But one point to be noted is that generally markets or stocks correct in the 11th month also. This I have seen so many times so we have to be on watch out for the 11th month also. But what ever may be the case we can wait for the market to make a lower high and also lower low for confirmation of down trend.
Positive for nifty:
• It is still at 15 day,50 day and above 100 day EMA
• RSI has once again moved above 50.
• DMI has given a buy signal – but DMI has to move above 20 to confirm the trend.
Negatives for nifty:
• OBV has broken the trend line.
• Weekly MACD and TRIX have given sell signal.
• Huge –ve divergence between RSI on weekly and daily charts.
• DMI is moving down.
• Daily MACD and TRIX are in sell mode
It can be seen from the above that –ve are decreasing and positives are increasing indicating that bullish sentiment is increasing in the market.
Directional Momentum Index:
DMI is indicating directionless for the market. This week the +D1 line is above the -D1 line and DMI is in neutral zone. During the week DMI has stayed around 15 only for whole of the week indicating directionless for the market. During the week it has indicated that bulls are having upper hand and the strength of the bulls is not being indicated by rise of DMI as DMI was stationary.
Pivot Point Trading Strategy:
During the last week market has moved exactly as per pivot it has stayed below pivot in the beginning part of the week and made a low of 4943(which is near the S1 which was at 4925) and there after moved above the pivot at 5041 and moved above the R1 at 5102 and towards 5218(nifty made a high of 5198). It can be seen from the pivot that pivots is giving a very good trading opportunity and if trade is made with straight stop loss we can make good amount of profit. For the coming week pivot is around 5113 if nifty stays above that then we have chances of moving towards 5282 and 5367. If it breaks below the pivot it can move towards at-least 5028 and 4859
M.Sri Mahidar
Sunday 27th December 2009 Time 18.40 IST
Trend is Friend.
No comments:
Post a Comment