Sunday, November 23, 2008

Weekend Views On Nifty!!!

2500 holds and so does the hope for the last of the Mohicans (bulls). I do get to keep my faith for a while (remember how I kept on harping about 2500 in all my previous posts) as the all red week, ends with a ray of hope. Time to scream Reversal! Nope that happens only above 3250! So what do we have? Well for starters we have a new range of almost 750 points (for traders to flirt with) from 2500 to 3250, which on breaking on either side would have a swing of at least 500 odd points. Another interesting thing has happened in the last week. The Sensex has made a new 3 year low close and nifty hasn’t. In fact if you plot the Sensex and Nifty chart on closing basis (a line chart) you will see we have a LL in Sensex and a teeny weenie HL in Nifty. Frankly I don’t know what to make out of it (remember I am just a guy who is into his baby steps), all I could think was of the DOW tenet; The Averages Must Confirm Each Other!



Let’s take a quick peek at the weekly chart below and see what it has in store for us. Yeah! Yeah the support is the 2500 (by this I mean just the intraday penetrations wont help the bears but a close below 2500 is needed). And as for the resistances, the lesser said the better, for they are in plenty and they are mean. 2860/2950 and 3030 are their for starters, take your pick! Speaking of the chart, not a Rembrandt in strict sense but I guess it will do for what I am tryin2see. The MACD lines are still not into a buy, the RSI is a tad below 30 (signaling oversold for the time being) is yet to break its trend line to signal a concrete buy. But most importantly none of these two indicators are showing any signs of positive divergence (remember a positive divergence on weekly charts is one of the most powerful signals and it aint happening yet).





Moving on to the daily chart; not really something the bulls would like to see. Quiet a paradox here; I have pasted a line chart of the recent move on closing basis. Paradox? Well the closing (Line chart) shows, what many would see it as a double bottom (I feel it’s a bit premature for that coz for a DB to confirm it must break above the intermediate pivot), I would rather say it’s a successful retest of the Low for the time being! But when we move to the conventional bar chart we have a triangle in the making (used some pink lines here for the Technicolor effect!) which is looking more bearish in its connotations and is more likely to break to the down side (Yes we wait for THE CONFIRMATION!). Confused? At least I am! The 20 period MA overhead at 2835 odd levels is likely to play a spoil sport. The MACD lines not giving any clear signal yet.





Time to go long? Why not, as long as 2500 holds there is hope…. Positional Long…I don’t think so! We are in a trading range and must trade with shoot and scoot mentality, tighter stops, as things get too volatile. Now days we are reacting to the global chills and spills and with so much of negative news coming in everyday its getting scary to even hold overnight positions. O boy it’s so hard to keep your faith alive in these tryin times. As for me I am just tryin2trade!!!



"People rarely succeed unless they have fun in what they are doing."

Dale Carnegie





No comments:

Post a Comment