NIFTY WEEKEND ANALYSIS for the week ended 14TH OCT 2011

Nifty started the week with good strong rally on Monday and continued its journey north and closed near weekly high at 5132, a gain of good 246 points or 5% gains for the index.  Long legged doji or a pinhead  formed last week was followed up by a strong bull candle indicating initial signs of reversal from the lows of 4720. The current setup looks like a double bottom formation on the weekly charts.

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

 Ichimoku Kinko Hyo: 

Ichimoku continue to be in sell mode but the price action is turning things around in the favor of the bulls, during the week nifty cleared the hurdles of Tanken sen, Kijun sen and the Komu, the prices have entered the cloud, the indicator will soon turn to buy mode and if the prices manage to clear the cloud this would be a strong buy

BUZZING NIFTY: ICHIMOKU KINKO HYO

Bollinger Band: Nifty started to rise from the lower BB and climbed above mid BB and nearing top of the band at 5201 odd level, how ever the previous two attempts have failed even to test the top of the band, in the weekly charts the immediate resistance is the mid of BB at 5275 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 5470 odd levels.

   

BUZZING NIFTY: NIFTY CHANNEL

  

NIFTY RESISTANCE:

Nifty has reached the resistance line and previous two close despite showing strength have failed to clear the resistance

BUZZING NIFTY: NIFTY RESISTANCE

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

BUZZING NIFTY: PRICES ABOVE 38DEMA

FIBONACCI RETRACEMENT LEVELS

Fibonacci retracement levels from a fall from 5740-4720 level, price moved above 38% retracement the next hurdle would be to cross the 50% level at 5213 and above that is the unfilled gap Zone.

BUZZING NIFTY: FIBONACCI RETRACEMENT PRICE ABOVE 38.2%

SHORT TERM FIBO extension:

Nifty got resisted at 61.8% of the fall from 5035-4727 level, a move past 5035 has change the short term trend in favor of the bulls, nifty cleared the 123% mark at  5107 level and is likely to target 5152,5188 and 5224 levels

BUZZING NIFTY: FIBONACCI EXTENSION OF NIFTY

NIFTY BULLISH FALLING WEDGE:chart updated till previous week nifty already made good move past the wedge resistance line

Nifty is moving in a falling wedge pattern which is a bullish reversal pattern if formed at the bottom of the price action,  the breakout above 4917 are early indications of the change in trend in favor of the bulls, 

BUZZING NIFTY: NIFTY BULLISH FALLING WEDGE

NIFTY- 9RSI SIGNALS: charts updated till previous week, the setup has worked well till now

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.

NIFTY 20,50 100 SMA:
Nifty closed above 20 and then moved on to close above 50 SMA , may now target 100 SMA @ 5278 odd level 

BUZZING NIFTY : NIFTY ABOVE 50SMA

 NIFTY BUMP AND RUN REVERSAL:

Nifty broke the down trend and the chart pattern suggest a reversal in Nifty, price staying above the trend line favors bulls

BUZZING NIFTY:BUMP AND RUN REVERSAL

THE WEEK AHEAD: Global market turned from the bottom and gaining good ground, the Indian markets too rallied and if Nifty manages to stay above the  current levels, can target the gap area soon, any correction up-to 5020(support area of 50 SMA and 38dEMA) level should be used to create fresh long positions in the index, below 4997 nifty will resume the downtrend and this up-move would then be termed as  false breakout from the range
Expected High /Low for the week5226- 5007, positions taken near these levels would give good trades for the week.

With expiry nearing the corner, markets tend to give more pains to the trades which are already in pain, the current setup looks like the pain is only going to increase for the short trades.

Option open interest shows a range of 4900-5200 for the current expiry

HAPPY TRADING!!!!!!!!!