August 5, 2010

  • Apple Inc has made a bearish break down. The stock has broken down from a triangle.
  • If the stock moves below 260 a good correction can be expected.
  • One can remain short in this stock with a stop loss of 263.
DOW JONES FUTURES HOURLY CHART
  • Dow Jones futures found resistance today at 10664 area.
  • For the last 3 days the index has been trading in a range of 10550 - 10665
  • A big move can be expected only if this range breaks.
  • Right now as you can see there is a break of an hourly trend line and the index is moving down towards the support area within the range.
UPDATED CHART

  • Nifty seems to be trading in a flag pattern after the break out from 5453 area. 
  • Now it is consolidation between 5466 and 5486 making it a bullish flag pattern.
  • If the index moves below 5466 the pattern will be invalid.
  • A break out of the above trend line can give at least 40 points from the break out area
  • Nifty should stay above 5468 the break out area for the bulls to be comfortable.
  • If nifty comes below 5468 and 5453 the long positions are at risk.
  • For good upward momentum nifty should trade above 5480 and close above it. 
  • NIFTY DAILY CHART  ANALYSIS
  • Nifty's rising wedge in daily chart is being tested. Yesterday's nifty spot high was exactly on the support line of the rising wedge. We will know today if the wedge is valid or not. 
  • Nifty has closed above 5 day high ema which shows strength. But did not close above the recent high point.
  • The third chart shows how the 20 SMA has given support to the index. But as you can see there was a close below the 20 SMA on all instances that i have shown here, followed by good upward momentum.
  • Also shown in the 3rd chart is how one can enter a safe trade when a consolidation range breaks out.
  • NIFTY'S CONSOLIDATION BREAKOUT TRADE
  • S&P 500 closed the day up 6.78(0.61%).
  • For the index to move up from here the recent price of 1131 and the resistance at 1136 has to be broken convincingly tomorrow.
  • It is very likely that the index will find resistance from here and a correction may start. But has a good trend line support in its daily time frame.
  • The index is trading above its 50 and 200 DMA. One thing to note here is that there are many instances of DEATH and GOLDEN crosses giving whipsaws. Here for example the price has gone above 50 and 200 DMA after the death cross. But the price is not pulling away from the 200 DMA. So if the trend line in daily chart breaks the threat of death cross is still there for the bulls.

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