June 10, 2010


  • The Price is moving steadily withing the wedge.
  • The horizontal line at 10050 is very important for today.
  • If during intraday dow falls below 10050 the index will go below 10000 again.
  • Any price movement above 10150 is good for the bulls




  • The reason for the us markets up move can be found in this chart
  • This is the pair EUR/USD 2 day time frame chart.
  • This pattern is calling for a reversal.
  • But as we all know the reversal of this pair is not going to be easy. So todays up move of Dow, SP 500 may not last long.


  • Dow Jones has formed an ascending broadening wedge in 5 minutes chart.
  • This pattern looks like it has a down side break out possibility.
  • With dow not able to sustaine above crucial levels the break down possibility increases.
  • But we have to see as the day goes on. And the time frame is 5 minutes which decreases its effectiveness
  • I just wanted to point out the repetition of patterns in all time frames.


  • SP 500 Unlike dow jones is still trading inside the channel.
  • And it is also trading near a resistance area 1080-1090.
  • Any up move is possible only on the break of this area and that means a break of the daily channel.


  • Dow Trading near the 23.6 fibonacci retracement level of the fall from 11250.
  • Any upside targets are possible only on crossing this level convincingly.
  • If dow manages to go above this level the next 38.2 fibonacci level comes around 10360.
  • Dow jones is trying to reverse the down trend 
  • But the index is approaching big resistance ahead.
  • Only a convincing trade above 10250 and a daily close above it can confirm a short term trend reversal .
DOW HOUR CHART

DOW DAILY CHART

  • Dow jones hourly chart is showing positive divergence.
  • Daily chart MACD is also showing positive divergence.
  • So in the very short term the index may bounce back for a short rally.
  • But with all the big bearish events already taken place in the charts it will be tough for any rally to sustain.
WEEKLY CHART
DAILY CHART
HOUR CHART

  • Microsoft weekly chart showing an oversold stochastic with positive divergence if price shows reaction chances are the stock can move up.
  • The daily chart is showing a triangle kind of pattern with the momentum indicator suggesting an up move.
  • The hour chart MACD is showing positive divergence calling for a bounce back.

  • Tata steel has broken out of an inverted head and shoulders pattern
  • The immediate target would be 477.
  • For short term traders stop loss would be 464

  • US DOLLAR hits the long term resistance line and turns direction.
  • So will this lift the equities only time will tell because if dollar decides to break the resistance that is bad for the equities.
  • So we have to watch the price action around 87.
  • If it closes below 87 it can be taken as a trend change.

  • Triangle has won till now
  • A move above 5068 will be good for the bulls.
  • 5068 will act as a resistance


  • We will know before the end of the day whether this is a false move or not. 


  • Remember above 5068 it is the triangle who will win.
  • Any strong trade below 4988 it will be the turn of the head and shoulders.

  • Nifty made a bullish cross over in March 2009 that took nifty from 3300 to 5000 levels.
  • Now nifty has made a bearish crossover.
  • Most interesting thing is that the crossover has happened in dow jones as well.
  • If dow breaks down nifty will follow it and the crossover will show its effect then.

DAILY CHART
DAILY CHART
  • An inverted head and shoulder possibility is there but don't go long just because of that possibility make sure it breaks the neck line. I am saying this because of the us markets which are in bear market situation.
  • Second chart is in a break down or break out situation just like dow jones. I feel dow is going to break down so nifty sill surely follow it. But that will take one or two weeks to happen. For now the price will consolidate between the upper trend line and the channel bottom line.

HOUR CHART
30 MINUTES CHART
DAILY CHART

  • SP 500 is forming a descending triangle in the hourly chart. And it looks like it should come down to 1040 any time. We have to see if it breaks the lower boundary there itself or gives another false upper break out before coming down.
  • 30 minutes channel is also suggesting a move towards 1035 to 1040 at least as it is in the bottom part of the channel.
  • Daily chart channel is also confirming the study decline in prices without any doubts. As the time frame increases the trend is clearer it's down down down. And any rally in daily chart should be sold .


  • The first chart shows the hourly channel. It looks bearish as the index should move to the bottom part of the channel now so the target for that should be around 9700 levels.
  • The 2nd chart the is the confirmation of the bearish cross over of 20 SMA below 200 SMA. Now what ever happens from here would be a retracement towards the 200 SMA and then another big fall will happen.
  • Third chart is the bigger picture that everyone should keep in mind out of this pattern dow will decide which way it wants to go. Seeing the developments it is going to be down. Or an upside false break out and then down.

Disclaimer

All the contents of niftychartsandpatterns are for educational purposes only and are not Investment Advice or recommendations offered to any person(s) with respect to the purchase or sale of the stocks / futures. Niftychartsandpatterns shall not be held responsible for the actions of individuals, parties, or corporations taken in response to the ideas, thoughts, concepts or information presented in this blog. Hence all the visitors are requested to apply their prudence and consult their financial or investment adviser before acting on any of the Ideas in this blog.

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My Favourite Quote

"All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope. That is why the numerical formations and patterns recur on a constant basis."
—Jesse Livermore