Nifty weekly technical update for week ended 5th December 2009.

Nifty Technical update for week ended December 2009
Nifty opened on a strong note continued to move up during whole of the week except on Friday it closed on a negative note. Last week I have indicated in my weekly update that the long tail formed on Friday the 26th Nov was not good for bears and that the bulls might gain upper hand at-least for the short term and the same appears to have happened during the week. Nifty is still above the 15 day EMA which clearly is giving an indication that we should see an opportunity to go long on every fall. 15 day EMA is at 5055 and any move below this should be taken as an opportunity to short. So please keep a close watch on this as this is very near to the weekly close of 5108. This week also nifty has went up near the previous top and then reversed. It went up above 5151 and towards previous high at 5181 and then reversed towards 5100 level. It failed to close above 5150 precisely above 5200 levels for the third time in last one and half month and also twice in last week, giving a clear indication that 5150 is a formidable resistance which has to be broken at-least for the short term. 5180 happens to be also to be near the crucial resistance level which would be discussed in the elliotte wave analysis. One thing is sure that nifty is facing formidable resistance at 5200 levels. Now it is sure that unless and other wise 5150 it taken out successfully and also 5200 then only bulls can be strong other wise bears would be coming into the market slowely to take the market to further down sides. All the technical oscillators are not showing any strength to the ongoing up trend and are pointing towards probable reversal rather than upside breakout which every body is expecting. Till 4700 is taken out the bulls would be making attempt to take the market higher if 4700 is taken out then we might see a bigger falls that we have seen in last eight months. We can observe in the market that even though the market is at the same level during the last one and half month, activity has picked up in the madcap stocks and they are just running away thus giving an indication that the activity has shifted towards midcaps which generally take place in the last stage of the rise. Directional Momentum index (DMI) which is one of the most power indicator of strength is still moving down which is clearly giving an indication that the rise is loosing momentum and also it lacks strength details discussion would be made at DMI discussed below. Market is giving clear indications of weakness but it is still not shown in the price so we have to patiently wait for the market to give its direction an just jump into it to generate good profits. So bears please have patience.
It can be seen from the chart below that nifty has formed a lower low compared to that of last month. Last months high was 5182 and nifty has reversed after touching 5181 giving a clear indication that the market might be slowely going into the hands of bears. Whether we have formed a double top or market would make strong rally from the current levels we have to wait and watch. It can also be seen from the chart below the there is a huge –ve divergence between the nifty and RSI, while RSI is moving down towards making a low nifty if moving up and trying to make a new high. This divergence appears to be huge so pointing towards probable reversal but we have to wait for the

Market to give the clear signal than jumping into the market on the short side. let the market confirm the trend and then jump as the chances of going wrong are less than that of now. So just keep a close watch.
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 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 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 16 levels to around 14 levels during the weak which is clearly indicating that the market is directionless and any call on eight calls should not be taken and 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 nifty has moved exactly according to pivot strategy. It stayed above the pivot and it virtually went near the R2 level before reversing towards R1. as can be seen from the above table weekly pivot is placed at 5077 as any move below it would take nifty to 4973 and then 4838. And if nifty stays above the pivot then we have chances of seeing 5212.

M.Sri Mahidar
Sunday 6th December 2009 Time 19.07 IST
Trend is Friend.

nifty technical update as on 3rd December 2009

Nifty opened on a positive note and continued to move up for whole part of the day and then corrected towards the end of the day and closed at nearly at the low of the day. In the mean time it made a two day low indicating that bulls might have tired out and that bears might have gained upper hand atleast for the short time. Nifty is still maintaining above the 15 day EMA which is signifying that bulls are still having upper hand, it is still maintaining above all the short term moving avarages indicating that bulls are still having upper hand. 5 day EMA is placed at 5095 so tomorrow it is going to offer resistance after which 15 day EMA at 5050 is going to give good support.

If you see the EOD chart of the nifty below, it clearly shows a clear heavy -ve divergence between the nifty and the RSI. There is huge -ve divergence and generally these type of heavy divergences occur when extreme bullish or bearish sentiments come into the market. These are clearly indicating that we are going to getting correction soon. It can also be seen that nifty has once again failed to pass above the 5180 and 5200 levels and this is the third time which it has failed in the last two months which is clearly suggesting that there are the curcial levels to be kept in mind in the days to come.

Nifty technical update - Dec 1st 2009

Nifty has opened on strong note and continued to move up during the day and closed virtually at the high of the day which is clearly indicating that bulls are in charge of the market. Nifty has now come to 5150 levels which it has failed to move past atleast two times in the last one and half month. And any failure to go past this time would be check mate for the bulls and bears would take control of the market and in that case i am sure that market might go below the november lows. nifty has to atleast move above and close above 5150 level for atleast 3 days, preferably above the 5200 for bulls to take charge. Now we will see what technicals are indicating. Technicals generally given what the undertone is and market generally follows the same. If you can see from the chart below there is Huge -ve divergence between nifty and RSI which does not augur well for the market. while RSI is moving down the market is moving up which is clearly indicating that undertone appears to be weak. It may also be seen that the MACD histogram is clearly showing -ve divergence which is also indicating that the undertone is weak.

Directional Momentum index which is one of my favorite which given the strength of the current trend is flat and is placed at 16 which is clearly indicating that the current up move lacs strength.

All these are clearly indicating that even though markets are moving up they lack strength and when ever reversal happens it would be to a larger extent. My policy is follow the trend, even though the oscillators are showing weakness market is moving up so eigther be with the market or do not trade.

Nifty weekly technical update as on 29th November 2009

Nifty Technical update for week ended 28th November 2009
Nifty opened on a strong note moved up in the initial part of the week made a high of 5138 and from there after it tanked and fell heavily on Thursday and Friday and recovered in the last half of Friday there by closing the week on a weak note. The fall on the last two days is on heavy volumes suggesting that the trend may continue in near future. It can be seen that nifty has failed to close above 5150 this time also, this is the second attempt of nifty at 5150 in last one month or so. Thus giving a clear indication that 5150 would be the difficult to cross in near time. The time gap of one and half months between two attempts to conquer 5150 is very significant, generally when ever such time gaps are there between two attempts, these levels are difficult to go past either in uptrend or down trend. So if history is to be seen than it would not be easy for nifty to go past 5150. So till 5150 is taken our successful we have all the chances of indices moving further down sides. I have been clearly indicating for the last few weeks that the days in which markets close on positive note the volumes are very low and the days in which market falls or closes negatively volumes are very high indicating that distribution is going and markets might drift lower. It can be seen from the chart below that volumes are very high in the last two days when the market has fallen violently indicating that down trend might has started and we might be seen further down sides on coming weeks. Nifty during the week has moved below all the EMA 5 day, 15 day, and 50 day MA in just two days indicating weakness. It also moved below the 50 day EMA and in later part of Friday recovered and moved above the 50 day EMA. 15 day EMA is placed at 5002 so as along as nifty is below it we should take every rise as an opportunity to short. If nifty moves above it then it is better to reverse positions with stop loss at those levels.

Positive for nifty:
• It is still above 50 day and 100 day EMA
Negatives for nifty:
• It is below the 15 day EMA
• Volumes are increasing with the every fall
• Weekly MACD and TRIX have given sell signal.
• 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 has 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. As nifty has once again failed 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 –D1 has moved above +D1 indicating strength of bears. Also the movement was very swift and straight indicating that bears are coming into very fast. But the DMI is still moving down and is placed at 16 but appears to have just started to move up it has to move above 20 to confirm trend. So keep a close watch on DMI to know the strength of the trend.

Pivot Point Trading Strategy:
Last week nifty has moved exactly according to pivot strategy. For the coming week the pivot is placed at 4962. If nifty moves above 4962(preferably close) then we have chances of moving towards 5117 if nifty fails to move above 4962 or if moves above 4962 and fails to move past 5117 then we can easily see nifty moving towards 4785 and 4630.It may also be noted that monthly previous pivot is placed at 4860 and yearly previous pivot is placed at 4856 so if these are broken then we can see 4500 easily.

Turtle Trading:
20 day phenomenon
Current trend - neutral
Go long above 5138( add to positions)
Square off – NA
Go short below: 4539.
ATR – 94

M.Sri Mahidar
Monday 29th November 2009 Time 19.55 IST
Trend is Friend.

nifty update for 26th November 2009.

Nifty has done what has been expected for last one week onwards. Opened on a stong note, then became weak and in the end fell like nine pins to close at the lowest point of the day, thus signifying that bears are becomming increasingly strong and further down sides are not ruled out. One of the noticing features of today movement is the long bearish candle associated with heavy volumes. Another noticing feature of todays movement is that nifty has broken through series of MA from 3 day to 15 day indicating the market might has turned down. It appears that 5150 is one level which nifty is finding it difficult to break and where ever it is going near it is reversing in a big way. So for the atleast short term 5150 is the major resistance which nifty has to creack other wise i have not doubt the the low of november would be again tested. It can be seen from the chart that trend line from the botton of november is broken with heavy volumes justifying the break of the trend line. It can be seen from the chart that the MACD is about to give a sell signal which would further strengthen the bulls. It nifty falls from there levels this the first time in last eight months the nifty would have formed a lowere top and it should be confirned by nifty breaking the november low. So longs better watch out.

M.Sri Mahidar

Trend is friend

Nifty weekly technical update as on 23rd November 2009

Nifty Technical update for week ended 22nd November 2009
Nifty was weak whole through out the week and on Friday it reversed all its weekly losses on Friday with a smart recovery thanks to short covering. This is reflected in volumes being less on Friday even though the market rose viciously and every body was caught unawares. Nifty has taken support exactly at the 15 day EMA and bounced back with vengeance giving a clear indication that the 15 day EMA is the crucial support to be broken. But as of now nifty is clearly above it and till the time it is above that there is no problem for bulls. Today also i.e on Monday nifty opened strongly and went on to close above the 5100 level and it may be noted that today also the volumes were less than that of Friday, it cannot be said less but significantly less that that of Friday which is clearly signifying that, even though markets are moving up the volumes are drying up this is one of the peculiar feature which is haunting every body as this is beyond technical. This is clearly raising doubt on the markets strength of the current rise. But what ever may be the case markets are raising and as the saying goes “boss is always right” as is for market also “market is always right”. Do not argue with it, so in the present case all the indicators are pointing towards correction market is still moving up so it is better we be with the market but with caution. RSI is also showing good strength to th market and pointing that further upsides are not ruled out.

It can be seen from the above chart that nifty is moving in a rectangular pattern for the last six months and every time it is touching the lower support line it is going near the upper resistance line. In the fall during the beginning of November the indices have taken support exactly at the support line and moved up vigorously. As per this pattern nifty has all the chances of moving towards 5300 and there after it should correct. But till the lower support line is broken the uptrend is intact. The support line appears to be at 4800 levels so till it is broken the uptrend is intact. So trade accordingly.

Positives for the market :
• Nifty is still above 15, 50 and 100 day Moving average.
• RSI is showing strength and has moved above 70
• DMI has given a sell signal indicating the bears have just gained upper hand
Negative for market.
• The trend line drawn from march low is broken
• Volumes are not still increasing.
• DMI is below the 20 mark indicating the lack of strength for the up move
• On weekly charts TRIX and MACD are in sell mode
Elliotte wave analysis:
There is not much change in the targets given by my in my update on 26th of September 2009. I have given targets of 5195 and 5520 and these two have not been achieved till now and we have to see whether these would be achieved or not. If the 5195 is not taken out then I have not doubt that we will be seeing the lower levels for nifty in weeks to come and surely below 4000.
Directional Momentum Index:
DMI is indicating directionless for the market. So market has to indicate the same so we have to closely watch the DMI as the way it gives a break out the market might move heavily.
Pivot Point Trading Strategy:
Nifty has behaved exactly as per the pivot, R1 for nifty was at 5080 and nifty made a high of 5079 and there after moved down sub-5000 and has taken support exactly at the weekly pivot of 4935 and bounced back to the levels of R1.
For the coming week the pivot is placed at 5021 and if it stays above it we have chances of seeing 5110 and today nifty has achieved it as it made a high of 5113 and then make an attempt at 5168 ( were in 52 week high of nifty is situated) if nifty fails to break above 5168 then we can see nifty making attempt at 5000 levels. so trade accordingly.

Turtle Trading:
20 day phenomenon has given a buy indication at 5079.
Current trend - buy
Go long above 5113( add to positions)
Square off – 4860
Go short below: 4539(add Positions).
ATR - 94

M.Sri Mahidar
Monday 23rd November 2009 Time 19.55 IST
Trend is Friend.

Nifty Technical Update as on 19th November 2009

Finally nifty corrected today even though it opened on slightly positive as the day progressed the nifty has become weak and finally closed a nearly days low. One of the noticing features of todays moves is that nifty has moved below the 5 day EMA which is the first sign of weakness. Todays move has taken nifty below 3,5,and 8 day moving average indicating that anticipated weakness has set into the nifty and also todays moved have taken nifty to three days low signifying that bears have taken upper hand on nifty and further upsides are not ruled out. It may also be noted that the fall of nifty from 5182 to 4539 has been in ten days and now today we have compleated 12 days and till not the top has not bee taken over indicating the up move lacs strength. So its better to trade on shorter side but if nifty scales past 5125 then we have all chances of nifty moving very swiftly so till that time its better to be on short side. first chart is 1o min chart and second chart is daily chart.