“As of now 3750 stays as support yet to be tested and on the higher side we go to 3848/3895/3920/3950! Will it be Step by Step or in one Big Candle???” These were the last lines I had written to close my yesterdays post. And with the look of today’s candle I guess we achieved all those levels in one day. Well this was possible only because of a very good rally in DOW last night. An easing in Crude prices and firm Asian markets in the morning. Let’s look at the 5 minute chart on the left. After the initial opening in the morning which met resistance at 3970, the gap opening of the 15th (yes gaps are very good basis of support and resistance), Nifty moved in a range throughout the day. If you were long yesterday then it was a jackpot otherwise nothing much in today for the traders, but for nimble scalpers, there were many opportunities. Now look at the hourly chart on the right. We have a LL in place and assumingly the pivot support for now. I have cluttered the chart with fib extensions. As you can see today’s move was exact 38.2% of the swing high and swing low, marked as A and B. On the hourly chart, immediate support lies at 3880. On the other hand, the overhead resistance is the falling 50 periods EMA/4000/and 4050/4060. Remember 4050??? The main battleground! Well on hourly charts it’s the confluence of the rising trend line resistance and 61.8% fib level of the above mentioned swing. It’s so strange that the same old level of 4050 is staring at us in so many avatars!
Looking at the daily chart below, it is crystal clear where we met our resistance today, right on the trend line. The daily also suggests 4050 level above this where it is also likely to meet the falling 20 period EMA. This 4050 is now beginning to look like a make or break level for the bulls and the bears.
"Little strokes fell big oaks."
Benjamin Franklin
3 comments:
As the market hit 4215 last week, there was a hope of an uptrend..but technicals were still weak and market fell..Now at around 3800 area - the opposite of it is happening as the technicals have turned up. "Little strokes fell big oaks."--As you have put it...days ahead should slowly change this bearish view to a bullish one..Hangseng has done a "Island reversal" yesterday..It is our turn to do so today..We have a gap down on Tue..from 4014 to 3970 and we have closed near 3950. A gap opening near 4000 will make that happen.I visit everyday your blog and Deepak singh, Sunil's , VFM , Tony Caldero and "netdania.com" and get all information required to understand the market so well. I am very very grateful for this contribution from all .Just wonderful..
Hi ..your analysis is good ... what is the system you are using to see these charts...
I am closely watching the 4000 to 4050 area today and also the hourly technicals for the continuation of this trend up.Let us not forget the local events which can upst the applecart.But then bulls love bad news.....
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