Weekend Views On Nifty!!!

We had a major announcement yesterday to do with Oil prices…we are moving to free pricing method….immediate result…the prices were free to rise!!! This augurs well for the oil marketing companies which might attract the FII investments and also the fancy of some fund house as sound investments. This also might lead to some political backlash (it usually does…after all politicians are paid for making NOISE!!!) and also will have an effect on inflation. It was this confusion yesterday that kept the NIFTY in a limbo…the OILnGAS sector tried to fire up the Nifty but the Banks doused any such attempt coz of fears that this hike in gas prices might lead for RBI to raise interest rates to curb inflation…so much for gassing around…time to take a look at the weekly chart of nifty;

                         

From the chart above we can make out;

1. We have multiple tops happening at 5400(cool that makes it one breakout point!)
2. We still trading above all the three key weekly EMA’s
3. Lengthy Negative Divergence on the indicators below

And now to the daily chart below;

                         

1. We have drifted too far from the nearest MA…mean reversion!
2. A bull Flag?
3. We still above all the three key daily EMA’s

Finally the chart which has all the action, the hourly;

1. A small H&S breakdown (shoulder tgt already achieved!)
2. Oversold indicators suggesting a short bounce???
3. 5180/5200 supports

Yes it’s this 5180 near bouts that conservative bulls will be looking at from here, i.e. a break from 5250 means straight down to test the above mentioned supports. The trend is confusing and the only play we have is “buy the supports and sell into the resistances”! Means if we open weak or flat then one can go long near 5250 with a tight 20 pointer stop and trail the position upwards. Some intraday strength will happen if we trade above 5285/5305 zone, after that the decider will be once again the 5335/40 levels.