Weekend Views On Nifty!!!

I was getting to nervous with the markets and then a god sent opportunity came up … a weekend getaway to Goa with the kids! It was nice to soak in the sun and surf and tryin2keep my mind off the markets for a while. Now back refreshed albeit still confused about the whole issue regarding where’s the support? Normally these kinds of falls used to be termed as capitulation and were max for a day or two but this thing is turning into a slow and painful process. This reminds me of an example what Dr. Alexander Elder had mentioned in one of his books about how you can BOIL A FROG ALIVE!

Anyway moving on to the weekly chart below we can see Nifty has closed below the channel. The only support below is 2880 where as the first overhead resistance is at 3250. The MACD is still in triple bullish divergence and gets confirmed when Price closes above the previous week’s High (wishful thinking!)

The daily chart below is even more confusing with its Hammers and Tongs…. Tongs part is a bit of an exaggeration! And speaking of Hammers, the less said the better, off late they are providing false hope of reversal to the Bulls only to be hammered again by the Bears. The price is below the channel, we have two LL’s in place with a tennie weenie LH in between. Again I repeat we are trading too way down below the 20 period MA and a pullback to it so far has been very unsuccessful. Another LH will complete the pair for a new move down or if we close above the previous LH we can safely assume that trend for the short term has reversed ( I guess I am seeing mirages and illusions!) and I should be excused coz like I always say that Hope Lies Eternal In A Bulls Heart!

The intra day action summarized below in the hourly chart is a clearer picture of the LL’s and HL,s I have been talking about. This also shows how the price has been reacting to the falling 20 periods MA. We have a small divergence in MACD histogram, if we trade above 3100 for some time we can safely go long with a strict stop at 3050 to a target of 3225/3250 for starters.

"Action may not always bring happiness; but there is no happiness without action."

Benjamin Disraeli