September 3, 2010

  • Dow Jones hits the upper end of the channel and is going up again as discussed below.
  • Dow Jones futures broke out today morning from the hourly channel
  • Now it is loosing most of the gains.
  • If the pull back is limited to the top of the channel one can enter a long trade.
  • S&P 500 has erased most of the gains.
  • It is trading near 61.8% fib ratio of its recent fall from 1129 to 1039.
  • If the day ends like this or in the red. The candlestick that's developing is also a bearish one with long upper tail.
  • If the index manages to come back and trade above 61.8% value 1100 can be crossed.
  • Dow Jones futures hour chart has broken out of the channel.
  • All major indices may open with good gains.
  • The time it has taken for this come back is relatively less. see the 2nd chart it has taken just 4 green candles to come back from 9900 levels to 10400 level. So if there is no bad news on the way this can take out the recent high.
  • Reliance industries is being sold off at every rise.
  • The first chart shows a weekly triangle break down.
  • It is trading below all important moving averages.
  • The next important level for the stock is the recent low of  915. Break of this level can bring the stock below 900.
  • But the bulls should not loose hope because RSI is showing divergence for quite some time. and the stock is highly oversold. So a bounce is possible, yes a bounce that's all it will be unless the stock manages to cross 20 DMA atleast.
  • Nifty should start to move up according to this pattern. Keep day low as stop loss

  • 5475 is violated but NF is finding support around 5470 region. 

  • If NF breaks the white trend line a long trade towards the upper end of the range is possible for 15 points.
  • If the lower line breaks at 5475 one can go short
  • The range that developed yesterday is still intact.
  • Once the range is violated combine it with Ilango Sir's levels to take a trade.
Thank you

  • Nifty is trading above its 20 day moving average. It has also closed above 5 day high ema.
  • Nifty daily time frame is trading in a range of 200 points from 5351 - 5549.
  • In the 3rd chart i have marked a resistance line, If nifty crosses that line convincingly we can see good upward momentum.
  • Dow Jones analysis after closing bell

  • Dow Jones has closed above its 50 and 20 day moving averages in daily time frame.
  • Weekly time frame shows price closing the day near 50 and 20 week moving average.
  • 20 week moving average will be crossing the 50 week moving average shortly. Since these moving averages are of weekly time frame the effect of this negative cross may not happen immediately.
  • The 3rd chart which is a weekly time frame is showing a possible Diamond pattern.
  • Nasdaq 100 index is trading close to a resistance line and a trend line which has supported the index for some time.
  • The index can give good direction in the next few hours.
  • Stochastic indicator is showing negative divergence, But if price breaks the resistance line negative divergence may not be effective.
  • If the supporting trend line breaks we can see good correction.


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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