Nifty was up by 0.8% last week. Tepid Industrial Productivity (IIP) number at 1.8% in December as compared to November was a Shocker along with a revised GDP outlook of 6.9% as against 8.4% in the previous year were the reasons of rally spoilers for the last week.India’s trade deficit too has soared to uncomfortable levels of US$ 14.7 bn.
On International Front Greece drama was and will be in Limelight for the following week,Eurozone dismisses Greek budget deal and holding back the Bailout fund setting 15 Feb as the dealing to Greece to come up with a solid plan worth implementing else Leave EURO zone.
S&P Downgrades 34 Of 37 Italian Banks on Friday.
Lets jump into technical of Nifty.
Last Week we discussed that 5435-50 range being the supply zone with various technical reason (Link to the Post)
Nifty did obliged to us and made a high of 5428 for the last week and started correcting from 5428.
Now Million Dollar question is it a trend reversal or just a correction? Lets try to find answer about it.
Nifty Hourly Chart
On Hourly charts Nifty is consolidating in the range of 5320-5428 with 50 Hourly moving average providing a good support.50 SMA Hourly stands at 5352 levels.
On Hourly charts shown above i have pointed all the 4 Gaps which have been left unfulfilled from the rise of 4640-428 on Nifty Spot. For a healthy rising markets such gaps needs to be filled as it can be considered as VOID left in a newly constructed building. Gaps will get filled in next down leg of Nifty most probably in February.
1 Gap :4641-4676
2 Gap:4744-4772
3 Gap:4879-4905
4 Gap:4947-4991
Keep watch on above levels as Gap provides an excellent trading opportunities.
Nifty Daily Chart
On Daily charts Nifty has been trading in a parallel channel with topping out formation at 5413,5423 and 5428. Supply pressure is coming on upside.
Every trending markets is followed by a Consolidation or sideways market.Now we had a rally from 15 days from 4675-5430 almost 20% rally now we had a 5 days of consolidation pattern from the range of 5320-5430. Best Strategy in consolidation market Buy near support Sell at resistance.
ON daily charts nifty oscillators are overbought and with persistent negative divergence as shown in below chart.But Blindly trading on negative diverge without price confirmation will lead to losses for a trader. Let the price break below 5320 to show the effect of negative divergence.
Support at lower level comes at 5251 which was trendline breakout point and 5178 which is 200 DMA.
Fibonacci Retracement of Nifty
50% fall from the highs. ie From High of 6338 to low of 4532 Nifty should retrace 50% which also comes at 5437,Nifty made a high of 5427 and started the correction.
Nifty Weekly Chart
Weekly charts after 5 week of rally 6week formed a DOJI pattern indicating slowing of momentum. Volumes for highest in recent weeks which can be a distribution pattern if unable to cross 5435 next week.
Also When we had the 14 weeks rally in 2009-10 we formed the similar DOJI pattern as marked in above chart and we had the fall in next week. Let see if History Repeat itself?
Watchout for 5251 which was trendline breakout level on Weekly charts
Nifty Monthly
Breakout on Monthly charts and monthly close should be above 5251
Global Market Updates
S&P 500
Falling Wedge formation with trendline breakdown below 1326. To be in downward swing S&P 500 should break 1290 on closing basis. It has been 1 way ride for low of 1158 to 1351 without any significant correction.
DAX is also trading in a parallel channel with high of 6829.DAX has also started its correction support exists at 6440
Nifty Trend Deciding Level:5320
Nifty Resistance:5363,5400 and 5440
Nifty Support:5273,5231,5193,5178
One more Request Many Readers have asked me to send my post through there emails as soon as i publish the post.
I would request all the readers to register themselves to Feed burner .
How this can be done?
When you open site on your right hand side there is a Sidebar with heading Post in your mail Box.
Please register your email id and confirm the subscription with follow up mail in your INBOX.
Once confirmed as soon as post gets published will be delivered to your Inbox.
We do discussion is Live market to update Nifty levels If you are interested you can LIKE the page to get Real Time Updates.
Follow on Facebook during Market Hours: http://www.facebook.com/pages/Brameshs-Tech/140117182685863
I would be happy if you send the trading system details to me with previous track records.
Dear Sir,
I have sent you the details.
Rgds,
Bramesh
Hi Bramesh …we have seen before also that many GAPs are left unfilled from 2009…is it absolutely necessary that GAPs need to be filled…. in that case we will go again to 4640 level….
Gupta ji plz correct your self first about the name of the author of this blog.some one already prompted about this.plz correct your self.
Thanks KP Sir, Hope you are doing great and Trading is going fine.
Rgds,
Bramesh
Dear Ramesh,
It looks some typing error under Nifty daily chart analysis. In place of 15 days it should be 25 days as market is moving up since 2nd Jan, 2012.
CM Gupta
Dear Bramesh,
You mentioned about current Hourly 50SMA at 5352. I hope it will be valid only for 1st hour of trading on 13th Feb, 2012. Thereafter it will change a bit on higher side during next hour trading depending on 1st hour closing value…. and so on for each successive hours of trade.
Please correct my understanding.
Thanks and regards.
CM Gupta