Weekend Views On Nifty!!!

The chart above is the weekly chart of Nifty; we have a slightly bullish outlook from the weekly candle. Nifty is desperately trying to break away from the falling channel resistance. The 50% of the recent swing A to B was tested twice earlier with Price almost making multiple tops above that level but failing to hold above it. The last weekly candle suggestive of a Hammer, and yet another attempt to seriously break the falling trend line and close above it. We have two very clear levels marked for trading on the weekly chart as of now (see the two pink horizontal lines) 4245 and 4647, a trading range! Weekly closing needs to be above 4370 to take on 4421/4452 or anything higher if you fancy. On the other hand any close below 4250 will lead to an all important test of 4150, the last make or break level according to me.

Now we shift our attention to the Daily chart below; we have our HL intact till now. The price has taken support on the trend line coupled with the support from the 50 periods MA. The overhead resistance lays in the form of the long term falling trend line (drawn from Jan highs) and the 20 periods MA at approx 4415 level (remember which just spoke about 4421 while discussing weekly chart above!). The MACD lines have given a bearish crossover and the MACD histogram is down under, the ADX is still lackluster and the +/- DI lines are converging.

This brings us to the hourly time frame. Though there is a short term bullish divergence at play on the hourly chart but it’s more of a Bears delight. The Price is desperately trying to close above the falling 20 periods EMA. We have had the 20/50 EMA crossover, we have had the 20/200 EMA crossover and now all we need is 50/200 EMA crossover on the hourly to real start thinking BEAR! We have a LL and LH pattern in place. The hourly chart suggests strong resistance at 4370/4400 levels.

This is all very confusing to me; I am of a view that if you are long then your conservative stops should be at 4200 or more aggressive at 4250. Any Gap Up opening on Monday, if fails to sustain above 4370, should be used as a shorting opportunity with a stop above 4390/95. For me, for now, the path of least resistance is DOWN!