Nifty weekly technical update for 26th sep 2009

Nifty Weekly Technical Update for week ended September 26th, 2009.
During this week nifty has closed on positive note on Monday only and went on to make a 5036 and on that day closed above 5000 and there after corrected and closed below 5000 at 4958. During the entire week nifty was showing signs of weakness and also appears to be indecisive. The formation of doji on weekly charts is clearly indicating indecisiveness in the market. One of the positive things of the fall is that the fall during the week was on very low volumes compared to last week. This is clearly giving an indication that there is no panic selling in the fall. Nifty is still above the 15 day low EMA which is at 4840 so till nifty is above 4840 there will be not danger to the bull run and also the last few months trend line also. During the last six months nifty has gone below the 15 day low EMA decisively only once and has taken very good support nearly two times. Considering this 4840 becomes a crucial level for bears. Any movement below that will give strength to the bears. One of the other positive things is that DMI which gives the strength of the current trend has moved above 25 and is now stationed at around 29 indicating that bulls are having strength and clearly giving an indication that we should not make an attempt to short but we should see for an opportunity to go long on every fall. But once 4840 is taken out the strategy should be reversed.
It may be noted that any breach of 4800 decisively should be taken as an opportunity to come into cash at-least 50% of the portfolio. And any breach of 4693 we should come into 100% cash.
Positives for the market
• Nifty is still above the 15 day low EMA
• DMI is moving up 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.

Elliotte wave analysis:
As per Fibonacci markets are rising from March 2009 onwards and have completed 6 months are now we have entered seventh month and we have made new high in 7th month indicating that we might see the market raising for the next Fibonacci number which happens to be 8 so we might see the market rising upto eight months from march 13 so we has all the fair chances of seeing markets raising at least upto November 2009. if Fibonacci has to be proved correct then we have all the fair chances of nifty rising till November. I have seen from last five to six years that Fibonacci has proved correct majority of the times and as far as I can remember there are only one to two failures in last six years. So odds are in favor of current trend upto at least November. So it appears that this diwali would be a good one for the investors.

Another point which I am driving from last one or two weeks is that nifty has moved above the 61.8% resistance level of the entire fall from January 2008. The wave started at 6357 January 2008 high and the wave ended in March 2009 at a low of 2539(even though the low was 2225 in October) the end of the wave structure is important. So the total fall was 3818 points. So the 61.8% of the same come to around 2360 points. So the 61.8% resistance comes at 4899 and it has been broken decisively and nifty has closed above it for more than two weeks indicating that we might has broke a significant levels a and not it should become a very good support level. During the current week also nifty has take support at 4900 indicating that 4900 can be a good support level for the nifty. As nifty has moved above the 61.8% resistance level, the corrective ziz-zag pattern which we have been assuming for last six months seems to have been negated. And now there are two patterns which can be assumed they are flat and also might be a triangle. For the time being I am assuming it to be a flat and the triangle would be discussed only when we can interpret the same. In flat we have three waves and it appears that we are still in the wave-A of the higher wave and it appears that in the “A” wave we are in wave-c which is depicted in the following chart.

One of the things which I can interpret at this point of time is that nifty is correcting its entire rise from 2003 to January 2008 and the pattern which is forming appears to be a flat at this point of time. And wave “A” of second higher degree is from 6357 to 2539 and now we appear to be in wave-B of the flat and in the wave –B we appear to be in wave –C after completion of the same we might see wave-C on higher degree and in that the fall after the end of wave-C of lower structure we has all the chances of seeing very violent fall which can be more violent that that which is witnessed during the last year. The wave structure from January 2008 high is given below.
If my assumption of flat is right then we are in the wave-C (lower structure) of wave-C (higher structure). The wave – B( of flat) appears to be forming a zigzag which is indicated in chart -1 above.Now we come to assumption of what should be the probable length and target for nifty. Wave-a of the wave –B wave from 2539 to 4693 a rise of about 2154 points and which lasted exactly 3 months which happens to be a Fibonacci and the wave-b wave in form of triangle and which again lasted 3 months which is again a Fibonacci. The what would can be the length of wave-c? wave –c should at-least move above the high of wave-A. High of wave-a is 4693 and nifty has moved above it. So the next target appears to be near 23% of wave-A i.e. it can rise 495 points from the break of the triangle which is around 4700 so the target comes to 5195 if 5195 is taken out the next target comes to 5520. So still the above said targets are to be achieved. One point to be noted that once the high of wave-A which is at 4693 is taken out then we can safely assume that wave-B has completed and we would start a new down wave which has chances of taking the market to easily around 3000 levels. But if it is not taken out then we have all the chances of seeing 5195 and 5520 I have no doubt in mind. So in this scenario keep a very very close watch on 4693 at-least for next one to two weeks.

Directional Momentum Index:

DMI is has moved from around 23 to 29 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 20, 25 and now nearing 30 which is clearly giving an indication that we have all fair chances of nifty moving up. Only one concern is that +D1 line is moving down.
Pivot point analysis:
One of the positive things of movement of the nifty for the last two weeks is that nifty has moved above the previous years pivot of 4856 which give a very high target for the nifty but donot be carried away by the same as we might not reach the target. So for the coming week the probable range can be 4896 to 5098.

Turtle Trading:
Turtle Trading - 20 day Phenomenon (gave buy indication at 4743)
Current trend – buy
Go long above – in buy mode
Square off - 4786
Go short below: 4577
ATR at 83

M.Sri Mahidar
Sunday 27th September 2009 Time 8:33:30 PM IST.
Trend is friend

Nifty Weekly Technical Update for week ended September 12th, 2009.
Nifty surprised every body on Monday as it opened with gap up and continued to move up whole week. The movement of nifty on Monday was nothing but surprise as it broke past the 4700 barrier and continues to move above and was successful in close above 4800 levels. This is clearly giving an indication that bulls have gained upper hand. One point which is worrisome even now is that the break out day on Monday the volumes were not high and on subsequent day the volumes were high. This giving a clear indicating that the break out lacks strength. But what ever may be the case our motto is “Trend is Friend” just stick to the trend till it reverses. In the current scenario 4700 becomes an important support level and we can be long till the 4700 is violated. It appears that nifty has broken out of a triangle formation over a period of last three months and has just broken out of it. But the break above is not on very heavy volumes giving an indication that nifty will be struggling to move up unless the volumes increase substantially on every raise.

One point which we might note is that nifty has been rising from 13th of March and we have completed six months. And nifty has made a new high in the 6th month; clearly giving an indication that nifty might be rising till its next Fibonacci number i.e. 8 so nifty has very high probability of raising till it completes 8 months from march. If this theory has to prove right we might see nifty raising till 13th of November 2009. So we should see nifty inching up till that time. I have been following this technique for last five years and it has proved itself right in majority of the times.

Another point which we have to note is that DMI which shows the strength of bulls or bears has moved up from around 11 levels to 17 levels after giving a cross over in favor of bulls. So it clearly giving an indication that bulls are gaining upper hand and further upsides are not ruled out. So bears be careful.

One of the very very important event which has to be watched in the coming week is whether nifty would be able to break above the important Fibonacci resistance level. Move above the 61.8% resistance level of the entire fall from 6357. The wave started at 6357 January 2008 high and the wave ended in March 2009 at a low of 2539(even though the low was 2225 in October) the end of the wave structure is important. So the total fall was 3818 points. So the 61.8% of the same come to around 2360 points. So the resistance level comes to 2360 points from low of 2539 so the target should be 4899. So nifty has all the fair chances of finding a formidable resistance at 4899. Nifty has made a high of 4889 and then reversed. So till now nifty has not moved above the important resistance level it nearly reached but not breached the level. So till this level is breached nothing can be said. If 4899 is broken then we has all fair chances of seeing 5200 and then 5500.

As can be seen from the above chart nifty has broken out of a triangle formed over a period of three months giving an indicating that market has broken out of a consolidation pattern and we might now see a trending market. So the current scenario is to go long on every fall till the low of Triangle is violated. One warning which I wish to say is that if the middle line of the triangle is violated in any fall then this is the first warning sign and if the lower boundary of the triangle is violated then we should come into cash no matter what the reason is. The low of the triangle is at 4600. So not 4600 become “lakshman rekha” for bulls. So till 4600 is violated bulls can have a field day.

One point to be noted is that the oscillators like RSI, Money Flow Index, Elder bulls ray, ROC are still showing –ve divergence which still give an indication that the under tone is still weak but the market is moving up so 4600 stop loss should be strightly implemented. If 4600 is violated we has to come to cash.

Directional Momentum Index:

DMI is has moved from 11.08 to 17.11 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 moved above 15 is a first indication of strength of bulls and movement above 20 will confirm the same.
Pivot point trading.
One important thing which has happened during the week is that nifty has moved above the previous years pivot at 4856 giving an indicating that nifty has made a significant break through during the week. Even though nifty has moved above 4856 it failed to close above it. Any weekly close above if would be very good news for the ears of the bulls as it paves way for very good higher levels. for the coming week nifties range would be 4707 and 4920.

Turtle Trading:
Turtle Trading - 20 day Phenomenon (gave buy indication at 4743)
Current trend – buy
Go long above - 4889
Square off - 4577
Go short below: 4353
ATR at 95

M.Sri Mahidar
Sunday 12th September 2009 Time 8:29:30 PM IST.
Trend is friend

Nifty Weekly Technical Update for week ended September 6th, 2009.
As has been with nifty for the last few weeks it is struggling to go past 4700. Last week close was strong at 4730 and from Monday onwards nifty opened up but started to fall moved below 4700 and moved just below 4600 and then bounced back to close at 4680 so again near 4700. Now we have to see how nifty behaves at 4700 whether it reverses of just blasts off from the current levels. The odds are in favor of the bears now. Unless and other wise nifty closes above 4730 strongly that too with heavy volumes the up trend is weak and will not last. Nifty has taken support exactly at 15 day EMA and then bounced back to the hands of bulls. So as the nifty is above 15 day EMA the strategy is to go long at every fall. And if it moves below 15 day EMA the strategy is to reverse the same. But my view is the 15 day EMA low is at 4555 so wait for the market to close below this level then only see for shorting opportunity as in last six months nifty has once gone below the 15 day EMA low that too after budget. So now our critical feature is that we should closely watch the 15 day EMA low and look for shoring opportunity only and only on close or breach of the same. The directional momentum index is just moving down and is at level of 11 indicating that the market or the trend lacks strength. Keep a close watch on DMI as the up ward movement whenever it happens will signal the strength of the trend. I will be posting it, when ever the sudden change in the same happens. As the market is not trending it is better to book profit when ever a rise or fall of 100 to 200 points occurs. Another point which may be noted and which has been pictorially shown by charts last weeks is the there is –ve divergence between the oscillators like RSI, TRIX and MACD indicating clearly that the under tone appears to be weak.

One of the huge power full indicators is Money Flow Index (MFI) which clearly shows whether money is coming into the market/stock or going out of the market/stock. For the last few months on weekly charts the MFI is continually moving down where as nifty is making a new high (can be clearly shown in the chart below). This divergence clearly shows that the money is going out of the market at every raise which is a very weak signal and good new for the bear’s years. Unless and other wise the MFI moves up we have all the chances of market tanking in a big way. Every body in TV channels papers etc are taking about huge liquidity and also that money is flowing into the market by it the MFI is showing the reverse. It is clearly telling that money is going out of the market rather that coming in. the Divergence between the two is very huge signifying that we might see some healthy correction in near future.

One of the powerful indicators which shows the strength of the bulls is the Elder bull ray which shows whether the bulls are gaining strength with every raise of loosing strength. There is –ve divergence between that and nifty in the weekly charts which is also showing that the market is weak and might break at any time.

We have to wait breaking of the six months trend line which appears to be at 4550 once it is broken then we can be assured that down ward movement has begun before that we should just watch and see. So keep a close watch at 4500 as any break of the same will signal an end of the up move.

Directional Momentum Index:

DMI is has moved from 13.62 to 11.08 has just given a buy signal i.e. -D has moved above +D. The downward movement of DMI is a clear indication of lack of direction. Wait for the DMI to move above at-least 15 and above 20 will give confirmation of trending indication. Wait for DMI to move by four ticks/points and see in which direction the break out has happened and open positions in that direction.So keep a close watch on DMI as it is expected to give a clear indication of direction in coming weeks. On weekly chart the DMI is in buy mode and is moving down indicating the bulls are loosing ground. Even though +D line is above –D line the distance between the same is narrowing indicating that bulls are losing ground.

Pivot Point Trading Strategy:

For the coming week the pivot is at 4664 any break of the same will pave way for 4592 and 4505. So for the coming week the nifty range should be any where between 4505 and 4751. The monthly Pivot is at 4586 any breach of the same will clearly indicate weakness and will pave way for 4430.

Turtle Trading:
Turtle Trading - 20 day Phenomenon
Current trend – buy (but my view is to go neutral)
Go long above - 4744
Square off - 4353
Go short below: 4353
ATR at 123

M.Sri Mahidar
Sunday 6th September 2009 Time 8:39:31 PM IST.
Trend is friend.

Nifty Weekly Technical Update for week ended August 29th, 2009.
The performance of nifty during the week is nothing but spectacular considering the state in which the nifty was at the end of last week technically. Nifty opened with gap up and continued to move up every day of the week indicating some strength in the market. One of the remarkable feature of the up move during the is that nifty was able to move up and close above it high of 4731 at 4732 which is very very powerful bull strength. But there is one big draw back nifty is moving up with heavy –ve divergence in oscillators indicating that the up move may be strong but the under tone is weak and when the market reverses it would be in a big way. There is –ve divergence in daily and weekly RSI, ROC clearly indicating that the market lacks strength and might reverse any movement. One of the markeble feature of weak market presently is that the DMI which shows the direction has strength or not is still moving down even though market has made a new high indicating that the movement lacks directional strength. The market is still above the 15 day EMA giving an indicating that we should go long on every fall. The 15 day EMA is at 4586 so till the market moved below this the trend is up and if it moves down the 15 day EMA then the trend becomes down and we should reverse the strategy of going short on every raise. The market has been finding support at the 50 day EMA and reversing from there to make a new high during the last two months, the 50 day EMA is at 4430 any movement of nifty below 4430 will confirm the strength of the bears and fall of the market will intensify on movement of nifty below 4430.

It can be clearly seen in the chart above that there is huge –ve divergence in the oscillators three power oscillators i.e. MACD, ROC, RSI giving a clear indication that the undertone of the market is very weak. This gives a clear indication the our longs should be strightly protected or we should start booking profits on every raise.

It can be seen from the above chart that nifty is in a trend from last six months and that the trend line for the same is drawn from the low of 2600 to last weeks high so the current support is at around 4500 levels the trend line was not broken till now and any breach of 4500 will not augur well for the bulls as bears will take center stage from that level onwards. So any breach of 4500 will be a significant event to watch out for nifty in the coming weeks.

Directional Momentum Index:

DMI is has moved from 15.19 to 13.62 has just given a sell singal i.e. +D has moved above -D. The downward movement of DMI is a clear indication of lack of direction. Wait for the DMI to move above 20 to give an trending indication. So keep a close watch on DMI as it is expected to give a clear indication of direction in coming weeks. On weekly chart the DMI is in buy mode and is moving down indicating the bulls are loosing ground. Even though +D line is above –D line the distance between the same is narrowing indicating that bulls are losing ground.
Pivot Point Trading Strategy:
Pivot has worked very well last week where in nifty is moved above the R2 indicating strength for the week. For the coming week the pivot is at 4670 any break of the same will pave way for 4598 and 4463. So for the coming week the nifty range should be any where between 4463 and 4805.

Turtle Trading:
Turtle Trading - 20 day Phenomenon
Current trend – buy (but my view is to go neutral)
Go long above - 4731
Square off - 4353
Go short below: 4353
ATR at 123

M.Sri Mahidar
Sunday 30th August 2009 Time 8:33:31 PM IST.
Trend is friend.

Weekly technical update 22nd August 2009.

Nifty Weekly Technical Update for week ended August 22nd, 2009.
Nifty appears to have stuck in a range bound market, this is clearly indicated by the movement of Directional Momentum Index (DMI). DMI is moving no where it just stuck between 14 to 16 indicating clearly that market is directionless. That is the reason why we are seeing on day up move and another day just reverse day. The best thing in this type of market is to stay our from trading and concentrate on the stocks which are technically sound. Market has this week on Friday again moved above the 15 day EMA indicating that bulls might have taken market into their stride and but still lack strength which is clearly indicated by the movement of DMI. Now we have to closely watch the movement of DMI when ever it starts to move up above 20 of 4 ticks in a day or two with –ve or +ve break out then we can see a big movement in the direction of the break out. In the last two years when ever DMI of nifty has come out of hibernation i.e. it has started to move up above 20 it has moved in the direction of the break out by at-least by 1000 to 1500 points. So you know what would is waiting for you a movement of at-least bare minimum 1000 points in the direction of break out. So keep a close watch on the DMI as it is going to give the strength of the market. Now from this week I would be discussion the technicals of nifty on daily charts, weekly charts and monthly charts to see the strength of the market in short term medium and long term. One point to be noted is that nifty is finding support at the 50 day EMA, during the last two weeks it has found support at 50 day EMA at-least four to five times. When ever it has gone near the 50 day EMA it heavy buying has come in which has taken the market past the 15 day EMA nifty is hovering between the 15 day and 50 Day EMA. Any breach of the 50 day EMA would be a significant event for the bears. 15 day EMA is at 4491 and 50 day is at 4375.

On daily charts nifty clearly lacks direction. All the oscillators are showing weakness, indicating that the market is in weak hands at-least for the time being. MACD and TRIX are weak but are yet to move blow the zero line to give strength to the bears. They are forming lower tops where as nifty is forming the reverse clearly indicating that market is in the weak hands but is yet to be confirmed by movement below the trigger line. RSI is still above 50 indicating strength for bulls even though its weak but it has to move below 50 to give some comfort to bears. It is hovering at around 50 to 55 for quite some time. So on daily charts nifty is clearly in the weak hands but is yet to be confirmed by the market. This gives us an option to look towards the weekly charts as to whether they are indicating any strength as of now.

On weekly charts it is giving strength to the bulls, this is the reason for the market to rise when ever it falls. As daily chart is showing weakness where as the weekly charts are showing some strength for the bulls. So we might be seeing more intense fight between the bulls and bears. MACD is in a buy mode and the average and trigger line are kissing each other and are about to give a sell signal but not given yet. TRIX is showing strength but its not been raising for the last two to three weeks indicating clearly that bulls lack strength. The distance between the average lines is narrowing indicating that it might give a sell signal we have to closely watch the TRIX on weekly charts as any sell indicated by same will result in nifty going down heavily and inversely if it starts moving up then market will also do the same. On weekly basis RSI is flat at 60 for the last five to six weeks indicating clearly that under tone for the bulls is weak or bulls are slowly loosing ground. On weekly charts there is –ve divergence in nifty indicating that bulls are clearly loosing ground. It may be noted that weekly RSI when ever it has moved above 60 and towards 70 and then can downs below 60 the markets have corrected in a big way. This has happened at-least six times from 2003 onwards. This time also nifty has moved above 60 towards 70 reached 67 and then now at 59 does this indicates some thing? One point to be noted is that on weekly charts nifty is showing diminishing volumes for the last five weeks indicating that what ever is happening is on very less volumes. But one thing which has happened during the last week is that nifty has formed a hammer indicating bulls have gained upper hand at-least for the time being. So keep a close watch on the weekly chart as of now in next two to three weeks we might get clear signal from the market on weekly charts which will be a significant event and would pave way for the bigger movement of the market in either direction. So keep a close watch as next two to three weeks will pave way for a huge profit opportunity.

On monthly charts, there is some divergences on the oscillators it self, while TRIX is showing strength for the bears, RSI and MACD has indicating strength for the bulls. MACD has given a buy signal in the month of July 2009. MACD has given a buy signal from below zero and is moving up. This is extremely bullish sign, which indicates that market might move up substantially in longer term. Previous to this MACD has given a buy signal in 2004 and was rising and in buy mode up to march 2008 where sell signal was given and subsequently to moved down below zero and now has given a buy signal below the zero line and moving up. As on monthly charts the buy or sell signals, indicate a significant change in the market sentiment in longer term. As MACD has just give buy mode and moving up, and it is only second time in last five years we can safely assume that we might be heading for good days in the markets in the months or years to come.

So now we can safely assume that on daily charts its indicating weakness, on weekly charts its indicating strength of bulls but weakening and on monthly charts it extremely bullish indicating that once the short term picture turns bullish we can see the markets moving significantly. The charts are indicating that the correction which might happen in the market in the coming week or month is going to be short lived and once the correction if it happens is over we can have fair chances of market moving significantly up to higher levels.

Directional Momentum Index:

DMI is has moved from 14.20 to 15.19 and has just given a sell singal i.e. -D has moved above +D. The downward movement of DMI is a clear indication of lack of direction. Wait for the DMI to move above 20 to give an trending indication. So keep a close watch on DMI as it is expected to give a clear indication of direction in coming weeks. On weekly chart the DMI is in buy mode and is moving down indicating the bulls are loosing ground. Even though +D line is above –D line the distance between the same is narrowing indicating that bulls are losing ground.

Pivot Point Trading Strategy:
As per this strategy the nifty is just above the pivot point and it has chances of moving towards 4613 and 4698 in the coming week. Any failure of nifty to move above 4613 will pave wave for nifty to move towards 4408. So the range for the market in the coming week is going to be around 4288-4698.

Turtle Trading:
Turtle Trading - 20 day Phenomenon
Current trend – Neutral
Go long above - 4731
Square off - NA.
Go short below: 4353
ATR at 123

M.Sri Mahidar
Sunday 23rd August 2009 Time 8:40:45 PM IST.
Trend is friend.

Nifty weekly update for week ended 15th Aug 2009

Nifty Weekly Technical Update for week ended August 15th, 2009.
As anticipated nifty opened down moved further down in the beginning of the week and suddenly unanticipated it made a very good reversal on Wednesday afternoon and there after started to move up marking a spectacular recovery. Nifty moved below the 15 day EMA and then taken support near the 50 day EMA at around 4350 and then made a spectacular recovery and moved above the 15 day EMA eventually. As nifty is above the 15 day EMA the strategy should be go long on every fall. 15 day EMA is at 4529 till it is broken you should be long on every fall and if it is broken in the beginning part of the week then we can short on every raise. So the pivotal value will be for the current week will be at 4529, but nifty has taken support at the 50 day EMA and then moved up very swiftly so till 50 day EMA is respected we will have no problem for bulls if it is broken then bears will take charge in a big way. So keep a very close watch on 15 day and 50 day EMAs as any violations of the same will have a big impact on the indices. Nifty this time also finding it difficult to go past 4600 decisively indicating further that market is not so strong as it appears to be. So it appears that 4600-4750 appears to be no-trading zone for the time being. Any break of nifty of 4750 decisively and with heavy volumes is a clear indication of bull move but we have a very huge Fibonacci resistance at 4850-4900 where in 61.8% resistance of total fall from 6357 to 2227 is there. So any break of 4900 is surely very very good news for the bulls and on the break of 4900 nifty will break away to a major bull territory. This time also the raise of last two days is on less volume putting doubts on the upward movement of the indices. We are witnessing a very unique phenomenon during the last one and half month as the both raise and fall are not associated with heavy volumes giving a clear indication that market is undecided and which every direction it moves it would be on a very big scale. So keep a very very close on volumes when seeing for clear break out and also keep a close watch on DMI which give the strength of the trending market. If you have been following my writing I have indicated that we have completed 5 months and 21 weeks of raise and we should now patiently for market to give a clear indication and just trade/invest in that direction. So keep you fingers crossed. The bias still appears to be down till 4850 is taken out decisively.

In the above chart it is not clear what nifty is forming, either a flat of an expanding triangle. Flat I have explained two to three weeks back in this case we might see nifty correcting after reaching around 4650-4750 levels to wards the 3900 levels. There appears also another option of expanding triangle as has been indicated above and in this case the volatility should increase as we progress towards completion of the same. In this case we might move toward 4700-4800 levels the fall very swiftly towards sub-3900 levels and then there after move up toward 4800 again to correct from there. So we are yet not clear what pattern the indices are forming so we have to keep a close watch on the 50 day EMA or 4400 levels which happens to be a crucial decider for nifty. It appears that in a week or two nifty will surely give a clear directional indication. If we are forming a expanding triangle then it might take another month or two to complete the same.
Directional Momentum Index: DMI is has moved from 17.10 to 14.70 and has just given a buy signal i.e +D has moved above -D. The downward movement of DMI is a clear indication of lack of direction. Wait for the DMI to move above 20 to give an trending indication. So keep a close watch on DMI as it is expected to give a clear indication of direction in coming weeks.
Pivot Point Trading Strategy

It can be seen from the above that nifty is above the weekly and monthly pivot indicating that bulls are still in charge of the market. So as per this strategy, the trading levels of nifty are between 4259 to 4680/- in the coming week.

M.Sri Mahidar
Sunday 16th August 2009 Time 7:27:45 PM IST.
Trend is friend.

Nifty weekly update for 7th August 2009

Nifty Weekly Technical Update for week ended August 8th, 2009.
Nifty opened on a strong note on Monday move up above 4700 closed for one day above it and then started to move down and the fall accelerated on last two days of the week finally close at the lowest point of the week. The Close at the lowest point of the week is indicating towards the weakness of the market. All through the movement during the last two weeks the up move was associated with higher volumes and the down move was associated with heavy volumes suggesting that at higher levels profit booking has taken place and that the market sentiment is not favor of bulls and was shifting in favor of bears. The movement during the week has confirmed that 4700 is the formidable resistance which may not be easy to be broken as nifty has failed to pierce it twice in the last two months. And also the nifty attempt twice has given an indication of a probable double top and reversal seems to have just started. If double top has indeed occurred then we have to see a very very big fall not seen in the last five months. Another point which I have been discussion for last so many weeks is the no of weeks and months of raise. For the week ended July 31st nifty has completed 21 weeks and also five months of raise. Both 21 and five are Fibonacci and the nifty has started to fall after exactly the Fibonacci months and weeks. So we cannot take the fall of the last week lightly. Another point to be noted is that the market has completed double top at exactly the completion of the time period. The time period and the patterns are pointing towards probable reversal in the markets. It appears that reversal has happened quietly and when majority were talking about probable end of the bear market and nifty touching 5200 levels or so.

Nifty has on Friday moved below the 15 day EMA indicating that for the short term the market has turned weak and now the strategy should be short the market on every raise but remember one thing if and if market move above 4536 then the strategy should be reversed.
On weekly chart nifty has closed below the last weeks open indicating that weakness has set into the market and it can reverse only on very good positive development. Any break of 4400 will open gates towards last month’s low of 3900 levels. The MACD on weekly charts is about to give a sell signal if given will give an indication of weakness on weekly charts. In weekly charts also the weakness is going to set in. Nifty has exactly closed at 5 weekly EMA and any break of the same will open gates on down sides weekly trix is buy mode indicating that the market are showing still showing some strength. TRIX on weekly charts at the same levels as that of January 2008 and has just started to move down by not give a sell signal. The downward movement is indicating that we might has see top but still not confirmed by TRIX.

It can be seen from the chart below that there is a huge divergence in the both MACD and RSI. In case of RSI there is divergence both on daily and weekly charts indicating that all is not well with the market. This is giving an indicating that although indices are moving up they lack momentum. Such divergences have earlier occurred in Dec 2007 and January 2008 and you know what happened after that markets tanked heavily. So be cautious will every raise, as every raise gives an opportunity to either short or book profit.

Directional Momentum Index:

DMI is at 17.10 and has just given a sell signal i.e –D has moved above the +D. Wait for the DMI to move above 20 to give an trending indication. So keep a close watch on DMI as it is expected to give a clear indication of direction in coming weeks.
Pivot Point Trading Strategy

As nifty is below the weekly pivot indicating weekness. As long as nifty stays below the weekly pivot we have chances of seeing 4386. One point to be noted is that nifty has struggled to move near the yearly pivot of 4856 indicating weakness and we might see further down sides. In the coming week the range appears to be 4290-4558.
M.Sri Mahidar
Sunday 9th August 2009 Time 8:20:45 PM IST.
Trend is friend.