October 4, 2010

  • Has taken support at 1127 as discussed in the below chart.
  • But one should also lookout for a possible head and shoulders pattern with price taking support at its neck line at 1127. Break of the neckline will be negative for the bulls .
  • If neckline continues to give support an up move towards 1134 can be seen
    • S&P 500 Futures has given a breakdown from the hour trend line.
    • Now 1127 in S&P 500 Futures can give support. If this level breaks then the correction may get deeper.
    • S&P 500 Futures hour chart is showing some upside momentum.
    • But on closing basis 1144 is proving to be big resistance for the index.
    • Closing above this zone and trading above it can only give a sustained up move for SPX.
    • First chart is the Dow Jones Futures daily chart which is trading outside the ascending channel. There is a resistance line drawn at the top of the daily chart. Good Moves in favour of the bulls are only possible if the resistance line is broken convincingly and at least a daily close happens above the resistance line. But the more time price spends below or outside the channel it increases the risk of a breakdown. 
    • The second chart which is the hour chart shows a triangle formation with one false breakout to the upside. This pattern may give an early clue to which side the daily chart is going to go. Since we already had a false breakout the next breakout may be a legitimate one.
    • NF daily chart has given a bearish candle
    • NF was not able to sustain at higher levels today.
    • Long tail of the candle suggests selling pressure at higher levels.
    • A weak opening tomorrow will confirm the weakness in nifty. 
    • Reliance communication is showing resistance at 181 , 193 and 207
    • The daily chart is showing a steady decrease in volume and the stock trading in a small range.
    • Breakout above 176 with good volume can give 181.
    • Today stock is trying to breakout on the upside as can be seen from the intraday chart posted below.
    • The gap that was created by NF in the morning has been filled.
    • Now if the price stays above fridays price actions it will still favour the bulls.
    • Only if it starts trading below friday's closing price bulls has to worry. In that case a retrace till 6150-6160 levels can be expected.
    • But if it continues to trade above friday's price action we can expect an up move any time.
    • NF has given 12 Green candles in row. Some correction or sideways movement can be expected before the next big up move.
    • Nifty Futures today achieved 6243 the target given on Friday CLICK HERE TO SEE IT.
    • Rather then saying the target achieved i should say that the technical s worked perfectly. Many times after a breakout the index will try to confuse us by retracing, which did not happen in this case. It was a clean breakout and never looked back.
    • Nifty Futures gaped up today and made an intraday high  of 6219 as of now.
    • Staying above the gap will completely favour the bulls.
    • and as i said in the chart a retrace can also happen which can still trap the bears.
    • The range that formed on nifty recently was broken on Friday.
    • Target for this breakout is 6214. I have given target for Nifty Futures in an Earlier Post: Click here to see it
    • Second chart shows how important candlestick formations at important places a hammer at the important support zone of 5350.


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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