Weekend Views On Nifty!!!

An auto bailout that’s gone awry in US, bad domestic IIP numbers and two Doji! Yes we have couple of them signifying indecision among market participants. We have been going up (well closing up after intraday weakness) on news which isn’t so good for the markets. So, are we disregarding bad news or is it an entrapment of the bulls?

The first chart below is monthly chart, just put this to show why all the people around, me included, been calling 2500 and 3250 the broader range- The play ground for traders.

The next chart is the daily chart with those two Doji, we just mentioned, nestled between the 20 and 50 periods MA’s. Remember my last chart posted on Nifty (the multi colored one!), we broke out of the range at 2830. We have tested it on intraday dips; therefore one can safely assume that till 2800/2830 is held this uptrend is safe, breaking 2860/70 will be first warning of weakness.

The hourly chart is showing price resisting at the 200 periods MA, with the indicators showing overbought levels, a lil negative divergence. See divergences are not per se reversal in the trend, think of them as momentary lapse of reason (temporary pause is a better word) the overall trend resumes once the price gets past this important resistance or support levels.

So where does it take me, a bit confused and undecided, well for me the breakout happened at 2830, now supports are 2800/2830, talking about resistances, we have 2950 and 3030 to take care of. Like I said Nifty is giving good ranged movements, and the strategy should be to play these ranges. It’s too premature to call it the end of the bear run yet!

"Everyone thinks of changing the world, but no one thinks of changing himself." Leo Tolstoy