August 27, 2010

  • S&P 500 will hit the resistance line in 4 hour chart if it continues today's trend which is up.
  • Index will struggle to cross 1065-1070 levels. If this level is crossed successfully we can see good momentum towards the upside
CHART - 2
  • Dow Jones futures is approaching 10100 level. Index got resisted at this area in the recent past.
  • A big move on the upside will be possible on a good breakout of this level.
  • If the index gets resisted at this level. It will trade in a range as discussed below
CHART - 1
  • Dow Jones futures is trading in a range of 185 points. with 10101 being the resistance and 9916 the recent low will be the support.
  • Break of 10101 can give good upside momentum for the index. Break of 9916 convincingly can take the index up to 9830 levels.
TARGET ACHIEVED
CHART - 2
  • Nifty futures is testing 5456 support line. Break down from this area can take it down to 5420 levels
CHART - 1

  • Nifty futures have been trading in a range of 5456 and 5487 since yesterday.
  • Bulls tried in vain to break 5487 many times.
  • Now the index is moving towards the lower end of the range. 
  • A clear direction may emerge only on a strong breakout from this range.
  • NEGATIVE DIVERGENCE IN NIFTY SPOT

  • Negative divergence can be clearly seen in nifty's daily chart in MACD and RSI.
  • See how the channel of nifty is going up and the channel in RSI going sideways with a negative bias.
  • One may get a good clue if the bottom support line of RSI breaks early. That may be the start of nifty's big correction. 
  • For negative divergence price confirmation is very important in this case nifty may move upwards again before correcting.
  • Nifty has closed above 20 SMA and above 5 day low ema. Price is also trading within the boundaries of the channel discussed early.
  • Thank you S.Kumar for asking about the negative divergence. I spotted the Channel in RSI because of that.
  • S&P 500 ANALYSIS AFTER CLOSING BELL


  • 1050 gave good support for S&P 500 on closing basis. That has been violated now. 
  • Price is trading below 200, 50 and 20 DMA.
  • 20 DMA is approaching the 50 DMA. So we can expect a big  move in either direction.
  • If the negative cross happens 20 DMA crossing 50 DMA that will be bad news for the bulls.
  • On the contrary this can also be a fast raise set too.

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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"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