- Dow Jones Futures is forming a broadening formation in its 4 hour time frame.
- The index is trading below its 50 hour moving average.
- The index may test 10400 levels before finding support.
August 11, 2010
- Nifty futures is showing a good support line in its daily time frame.
- Break of this line could give a correction till 5400 levels.
- On the contrary as it had done for the last 5 trading days the line may give support for the index as well.
- The second chart shows how a broken resistance can act as support. And that's why when a pattern breaks out the price comes back and retest the broken line. Only to move up from there.
- The retesting of the broken area is not a thumb rule. But small traders who take a position when the break out happens are thrown out of the trade when the retest happens.
- The first chart shows the break of raising wedge and the price did not move down. But it started moving in the opposite direction. Now that the retesting of the broken line has finished. Nifty may start moving down.
- The Break out above 5350 has an impending target of 5520 that has not happened yet.
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