Weekly technical Analysis for week ended
8th June 2013
Nifty during the week has been closing lower on
each day of the week which is not a good news for the bulls. Nifty has moved
blow the 50 day EMA and now it is exactly at 100 day EMA. We have to see
whether this would offer support or not if it is taken out we have next
important support at 200 day EMA which happens to be around 5750.
In previous update I have mentioned that nifty has
bank nifty have completed on monthly chart demark sell set up over the period
of 5 years and which is a bearish signal and if nifty moves below the 13th candle low of
5930 then we have all chances of confirming the pattern and for bank nifty its
11800. For nifty this weeks close has confirmed the same and for BNF its still
far away.
On weekly chart nifty has fallen for continues
three weeks which is a bearish signal but still the directional momentum
indicator is not giving strength to the bears its moving down indicating that it
lacks strength, still confirmation from the DMI comes we would not be having so
much down side. So bears might return any time during this period. So even
though the trend is moving down we still wait for confirmation from the market.
Surprisingly markets have memory, puzzled you might
be. If you apply time series analysis we can easily arrive at the probable
trend and also how many weeks or days I would last. If you see the chart of
bank nifty from 2008 to till now the time gap between each successive tops (
one top to next top) is average around 17 to 21 weeks with one or two
exceptions. And the time gap between each successive bottoms( between one
bottom to another bottom is 14 to 17 weeks with one or two exceptions in
between. And if you apply this currently the time gap of 18 weeks have completed
from its previous top at 12975( on 18th Jan 2013) so we should now
expect the market to correct from current levels and the time series tells that
we have some long time left for it to form bottom. I have indicated earlier
that the time gap between each successive bottom is 14 to 17 weeks. Considering
this we have completed 8 weeks from bottom of 10904 so we have now nearly 6 to
8 weeks left for the market to make a new bottom so we have all chances of
market moving down or bottom is nearly 6 to 8 weeks away so we can surely
expect the market to move down. So applying the time series analysis can be
such an handy, and now we can easily say the markets have memory.
The chart below shows the time series analysis from April 2008 till now
and you can easily see the time series analysis which has been done by me and
at each time it easily gives clues at exact timings and this can be extremely
usefull in identifying the turns. Whenever
exceptions occur the market moves wildly so market gives clues and we should be
able to just identify them.
The second chart also indicates that market has
memory. It can be seen that market reacts exactly at the trend lines it can be
seen that nifty has been reversing whenever it went near the upper trend line
and at the same time it reacts whenever it comes near the lower trend line. Currently
lower trend line is at around 5600 levels so we can expect the market to moves
down to be in conformity with the trend line technique and also the time series
analysis.
M.Sri Mahidar
Trend is Friend
Celebrate Life
Sunday 9th June 2013 19.55 IST
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