NIFTY WEEKEND ANALYSIS for the week ended 08TH OCT 2011

Nifty yet again started the week on a negative note and reached the lows of 4720, but managed to protect the lows and the pressure continued, with holiday on Thursday and global negative clues saw nifty closing near its 52 weeks low, good rally in global markets on Thursday lead to a sharp gap-up opening on  Friday (with limited price action during the day, nifty  close at 4888 , 14 points gain over previous week, making a long legged doji or a pinhead in the process. Moody,s downgrading of top banks added to the pressure and bankex showed bigger losses as compared to Nifty

Let us see the alignment of some of the key technical Indicators

 Ichimoku Kinko Hyo: 
Gave a sell signal at the start of the week, this is a strong signal as the price action is well below the cloud, Friday close above the Conversion line gave some hopes for the bulls.
Any upmove from here would face resistance at the cloud( Komu) at 5036-67 levels

BUZZING NIFTY: ICHIMOKU KINKO HYO SELL

Bollinger Band: Nifty started to rise from the lower BB and would gain momentum only on a close above the mid BB currently at 4972 odd level

BUZZING NIFTY: BOLLINGER BAND

 

NIFTY MOVING IN A CHANNEL

From the up move to the high of 6339 to a low of 4720 nifty is moving in a channel, giving good trades, nifty after touching the lower end of the channel at 4720 level is now moving north and would be targeting 5550 odd levels.

   

BUZZING NIFTY: NIFTY CHANNEL

  

NIFTY BEARISH FLAG:

Nifty has formed a bearish flag, the price action has also formed a channel a break from the range will give a clear larger direction to nifty, however a break down of the channel is the preferred view, the bearish flag pattern will then have a target of the length of the pole, a good 1000 point fall on the Nifty.

BUZZING NIFTY: BEARISH FLAG

38 DAY EMA :  This moving average has been successively giving good trades throughout the year 2011,only a comfortable move past 5020 level would add strength to the BULLS

BUZZING NIFTY: 38DEMA

FIBONACCI RETRACEMENT LEVELS

Fibonacci retracement levels from a fall from 5740-4720 level, indicated immediate resistance at 4952 and 5110 level and the next hurdle would be to cross the 50% level at 5230 and above that is the unfilled gap Zone.

BUZZING NIFTY: FIBONACCI RETRACEMENT

SHORT TERM FIBO PROJECTION:

Nifty got resisted at 61.8% of the fall from 5035-4727 level, a move past 5035 would change the short term trend in favor of the bulls, however fail to stay above 4917 level would encourage the bears to pull Nifty down again to the lows of 4720 level

BUZZING NIFTY: NIFTY SHORT TERM FIBONACCI EXTENSION

NIFTY BULLISH FALLING WEDGE:

Nifty is moving in a falling wedge pattern which is a bullish reversal pattern if formed at the bottom of the price action, watch for the breakout above 4917  for early indications of the change in trend in favor of the bulls, a fail to cross 4917 level would lead nifty to the bottom of the wedge making newer lows before the bullish breakout.

BUZZING NIFTY: NIFTY BULLISH FALLING WEDGE

NIFTY- 9RSI SIGNALS

BUZZING NIFTY: 9RSI--NIFTY PRICE BEHAVIOR

 9RSI- a tool to analyze oversold/overbought conditions besides showing relative strength, has been giving good trade setups and early indications of larger moves in the making, the chart shows  some instances where NIFTY--9RSI have given good setups marked as 1(1A-1B) 2(2A-2B) AND 3MARKED AS 3A&3B

1. In the 1st instance when nifty made lower lows the RSI made higher lows, indicating higher relative strength and resulting in higher high in Nifty.
2. In the 2nd instance when nifty managed to make the 2nd top at 5700 odd level, the RSI made a lower top indicating relative weakness and nifty fell on to make newer 52 week low.
3. In the 3rd instance marked as 3A&3B show  that nifty almost reached its 52 week low (4720 {3A}-4727{3B}) the 9RSI has managed lower lows and turned up on Friday, can this setup manage to give strength to the Bulls this time around ????? the price action would have to confirm this by moving above the channel.

 THE WEEK AHEAD: Global market turned from the bottom and gaining good ground, the Indian markets missed out for a day due to Holiday and would sooner or later cover up the lost opportunity, Moody's downgrading of global Financial Institutions has shown the pressure  but the other sectors have managed to keep the index up and the Financial sectors are to be watched for further Strength/ weakness

Expected High /Low for the week 5002-4808, positions taken near these levels would give good trades for the week

HAPPY TRADING!!!!!!!!!