Not much of change in weekly perspective of nifty from last week. We have drifted into a range and breaking either side will generate a new trend. Incidentally we are tiring at resistances and on the contrary breaking supports very easily. If we have to safely assume we have reversed the trend then we need to close and trade above 3250!
A brief look at the nifty weekly chart below shows we not only struggled at 23.6% (approximately at 3225) retracement of the fall from January highs to October lows, but we have also closed below the 61.8% (approximately at 3030) retracement from 2003 lows to 2008 highs.
The daily chart below shows that we are still struggling to conquer and close consistently above the 20 period MA. We are moving in tight ranges but unfortunately the bias is down. We have a bull flag happening, marked in pink lines but that only gets confirmed once we trade above 3070/3115 levels which of course is also near the 3160 levels we are hoping for our inverse H&S breakout. And speaking of pattern failure we will negate the flag pattern if we fall below 2750. I am still betting on 2700/2750 to hold (wishful thinking again!) and as far as going to down to check the lows I am of the view till 2500 is safe; no worries! For now 2750 and 2950 is the new range we have made, and between this range we have 2860/70 an important pivot, if once crossed would give a fast 100 points to the upside.
Once again I wish to reiterate with so much of wild swings in global markets and news based openings and falls (which is what we are doing off late) just make sure if in doubt the just be OUT and for people who are in; the magic word coined long long time back is use STOPS!
"Everyone has his burden. What counts is how you carry it."
Merle Miller
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