July 12, 2010

  • Dow jones 5 minutes chart seems to be trading in an ascending triangle.
  • A Break out on the upside should give at least 30 points.
  • Break down on the lower side should bring it below 10180
  • The death cross has not given anything for the bears till now.
  • But the rally if stops before 50 day SMA or 200 day SMA will give the bears a chance to go short aggressively.
  • For the bulls a strong breakout above 10200-10300 may take it till 10600 levels again.
  • DOW TRADING NEAR 50 WEEK MOVING AVERAGE
  • Dow Jones is trading near its 50 week moving average.
  • If this resistance is taken out on closing basis the index can move to the next band of 10300-10400 level.
  • DOW JONES APPROACHING THE RESISTANCE ZONE
  • Microsoft stock is trading above a trend line in daily chart. It is respecting the trend line till now.
  • Between 24 to 25 the stock will hit the channel top resistance. and a band of resistance in the same area.
  • So at 25 one can try to go short with a small stop loss. The risk reward ration seems to be good if one go short near the channel top
  • I shares russell 2000 index weekly chart is shown with a support line.
  • Look how many times the index has taken support at the line.
  • When the index approaches this line one can take a trade with a good risk reward ratio.
  • Nifty has formed a doji at the top. It can be classified as a Spinning Top as well. What ever it is the pattern is showing indecision between buyers and sellers at the top of the trend.
  • If bearish candles follows the trend will turn negative.
  • Nifty 15 Minutes Chart showing  Support and Resistance for the index. 
  • If the price closes within this pattern another gap up or gap down will play out to decide the next direction.
  • The Hour chart trend line is holding nifty up.
  • But if nifty goes up to the recent high above 5400 the hour rsi will start developing negative divergence.
  • RSI has already broken its hour trend line.
  • To negate this short term negative picture nifty should close above its day high.
  • Nifty is trying to fill the gap.
  • If the bulls are stronger the price should close above the gap. 

  • See how nifty makes a consolidation pattern in hourly and gap's up in the morning.
  • The hour consolidations did not give an intraday entry.
  • The hour chart formed a base pattern when it was trading around 5235-5240. And from there it gaped up. then two consolidation patterns which gave break outs by gap ups.
  • So conclusion when in an up trend hold on to your long positions with trailing stop losses and booking partial profits. 
  • Nifty weekly chart analysis.
  • Bank nifty resistance zone
UPDATED CHART
UPDATED CHART
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  • CNX IT may find resistance at the top of the raising wedge.
  • A Breakout of top trend line should be watched carefully for a false break out.
  • INFOSYS DAILY CHART ANALYSIS

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"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