June 13, 2010

  • Powershares qqq trust series I has closed above it's 10 day, 20 day and 200 day moving averages on friday.
  • The second chart shows a macd buy signal along with a triangle breakout situation. There was a MACD prior to this which turned out to be a whipsaw. So this buy signal may work along with a breakout of the above trend line. 
  • Closing above 46.70 is very important for the bulls. This means closing above the 20 week moving average. Above that the next resistance are 49.92 and 48.12 
  • SP 500 EOD ANALYSIS
  • RUSSELL 2000 INDEX EOD ANALYSIS
  • DOW JONES WEEKLY ANALYSIS
WEEKLY CHART
DAILY CHART

DAILY CHART

  • First chart is the weekly chart of reliance industries. Trading above 1050 will be positive for the stock. and the next resistances comes at 1064, 1069,1086,1104. Traders can use these levels.
  • And unlike nifty reliance is trading above its 200 day moving average.
  • Reliance went below its 200 day moving average on may 17 and on may 31st it came back and closed above it only to fall below it on the next day itself. Now on friday reliance has again closed above its 200 day moving average. So if it sustains above it that can push the stock upwards.
  • For positional traders the stop loss can be kept at 980-985. This is just below the ascending triangle that reliance has been trading for many months.
  • The third chart shows an rising wedge and a (descending broadening pattern or one can classify it as a triangle as well). What ever it is when i combine the weekly chart and the moving average situation it looks bullish to me. But please keep strict stop loss, for example if one is taking a day trade above 1050 if he/she is a day trader they should get out if the stock hits 1040.
WEEKLY CHART

DAILY CHART

WEEKLY CHART


  • NIFTY Weekly chart is showing multiple patterns.
  • But Every pattern has one thing in common.
  • All of them are pointing towards an upside break out.
  • So if the break out happens were do nifty go from there?
  • The answer may lie in the triangle that is developing. These triangles so often give a false break out.
  • If we look at the moving average situation that is also giving mixed signals. 10 day moving average is pointing up. 20 day moving average is pointing down. 200 day moving average has been moving sideways for sometime. But the price is above all of them indicating short term bullishness. Remember it is only for the very short term. The euro situation has not changed one bad news from europe will give a gap down opening. So don't carry your positions overnight Till the trend becomes clear.
  • May be the inverted head and shoulders can show us a clear way. But in the recent past that has also failed . We had a failed inverted head and shoulder pattern in SP 500.
  • So one can take a high reward low risk trade at the time of break out. Keeping a stop loss just below the break out. If the break out is false you close your position and go home. If it is a legitimate break out you enjoy the profit
Thank you

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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