September 16, 2010

  • Dow Jones Futures has given a breakout from the diamond pattern.

  • Dow Jones futures hour chart is taking the shape of a diamond.
  • Diamonds are known for their bearishness. But Dow Jones and SPX in their daily chart are consolidating for big breakouts So this one can go in any direction.
  • S&P 500 is trading in a broadening pattern. The above chart is of 30 minutes time frame.
  • Within the pattern it is trading in a range of 1118 - 1126. Once this range gets violated, index will move towards the support or resistance lines.
  • S&P 500 futures 4 hour chart with an  inverse head and shoulders pattern. Price is trading above the neckline is yet to give the big breakout.
  • After crossing the neckline price is trading in a range of 1108 - 1122. It seems the index will test the weak bull and the weak bear before taking the next big direction. The violation of the range may give good direction.
  • 5824 NF seems to have given support for now. Closing above this will be good for the bulls.

  • Today's bullish Hour candle being engulfed by a bearish one. It was a result of a doji that stood between the bull and the bear

  • The hour candle has given a doji which has come at the top of the trend.
  • Bulls are safe if NF trades above 5824
  • NF has broken the resistance zone.
  • NF will target 5900 today.
  • Nifty 15 Minutes chart is showing a resistance zone from which selling is happening for the last two day's.
  • So Trading above this area will be very positive for the index and NF will try to cross 5900 above this resistance zone.
  • So what is the target of this weekly channel breakout?
  • The Broad range nifty was trading before the channel breakout was about 600 points.
  • The breakout happened at 5620 levels.
  • So even if one Trades for 300 points he should wait for 5900 to come.
  • Reliance is trading above 1007. Above 1007 stock can target 1030.
  • 1007 and 993 should act as support now.
  • Fresh longs are not suggested. But those who are long from 958 levels can hold with T S L.
  • Daily chart of tata motors is showing bearish engulfing pattern.
  • Now if the stock closes below 20 dma, stock may come down to 1008. Below 1008 stock will see some more correction.
  • One should wait for the sell signal to come. We can't enter a trade just because of bearish engulfing, But price confirmation is the most important criteria.
  • First chart shows Dow Jones trading above its 10 and 50 DMA. 
  • Now Bulls should be worried only if the price closes below the 10 DMA.
  • The 2nd chart shows the Dow Jones Futures chart Breaking out of a triangle. IF Dow Futures sustains above 10500 it will favour the bulls.


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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