Monday, August 4, 2008

Nifty Recap For The Day!!!



Volatility marked today’s move. With no strong cues from the Asian markets we were a bit fickle minded ourselves too. The chart above on the left encapsules the intra day action on the 5 minute time frame. A cautious opening, and a failure to attain new highs. We made a DT (plus we had an ascending triangle which failed) and finally broke the rising trend line along with the 20 period EMA. This signal was corroborated by the negative divergence in the MACD lines and also noticeable was when the price made the first attempt at conquering the top the MACD Histogram had barely moved above the zero line signifying the bulls were just not strong enough. As I had mentioned in my post yesterday 4370 is important, well we made our double bottom there (a very good opportunity for trading). The hourly chart on the right has formed a triangle. A breakout of 4440 and 4350 (btw 4360/65 has both the trend line support and also that of the 20 period EMA) signals the next direction of Nifty, as indicated by the arrows. Above 4440 we have 4500 and 4550 to take care of. A break below 4350 would signal a retest of 4250.

The chart below is the daily chart. Off late with so many lines drawn on it, this looks a bit smudged. But no other choice as one needs to keep these clusters of trend lines for future reference. On the daily also, one can see a small symmetrical triangle. The problem with these triangles is that they are very notorious in their behaviour. You just never know which way it’s going to break till it breaks actually. Another thing noticeable is that the ADX is going quiet. My guess, maybe its time to consolidate for sometime.

"The greatest mistake you can make in life is continually fearing that you'll make one."

Elbert Hubbard

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