December 2, 2010

  • QQQQ is trading near the resistance line of a broadening pattern in 30 minutes chart
  • Price may get resisted here But the black dotted line may give support in case of a correction.
  • Large correction will be possible only if the dotted line gets broken.
  • If the up move is to continue from this level price needs to breakout above this pattern. 
  • One more thing to note is the presence of an unfilled GAP in the chart
  • SPY Four hour chart with cloud breakout and resistance levels.
  • Last time we had a major breakout in this time frame was at 113.18 level. Before the resistance level broke out price gave a breakout above the cloud.
  • We are seeing a similar breakout above the cloud. What is pending is a breakout above the resistance level which is at 122.92.
  • This rally will gain further momentum if price breakout above 122.92. Getting resisted at 122.92 will be negative.
  • ES Fibonacci levels in 30 minutes chart.
  • Fall from 1211 was stopped near 1202 which is near 23.6% Fib level
  • Important numbers for ES today are 1202 which is the support 1207 and 1211 will be the resistance  for ES to cross to move ahead.
  • 23.6% and 38.2% Fib levels may act as support in case a correction happens.
  • S&P 500 ANALYSIS AFTER CLOSING BELL

  • NFLX was Down yesterday followed by a dark cloud cover pattern in the stock.
  • The dark cloud cover is a bearish reversal pattern with high reliability. But one look at the chart shows 3 prominent occurrence of the same pattern which was followed by a correction.
  • The Dark cloud covers patterns of NFLX has given good correction but the stock is still in a structural bull market. Trend line drawn in daily chart is yet to be violated.
  • So yesterday's bearish pattern may give a correction but the long term view of the stock is still bullish.
  • READING ON DARK CLOUD COVER AND PIERCING LINE PATTERN

  • ES gave a breakout at 1184 levels and went till 1211.
  • 30 minutes chart is showing a bull flag breakout at 1207 level.
  • Staying above 1207 will be positive for the index.
  • Price moving below 1207 will be negative in the short term.
CHART-II
  • Day high is violated.
  • If sustains above 6027 nifty will target its 50 DMA or the next Fib level which is 61.8%.
  • Price moving below 6027 will be negative.
CHART-I
  • Nifty intraday chart is showing a range of 5986 to 6027
  • An ideal trade would be to breakout on the upside to go along with the primary trend.
  • Break of 5986 may get support near 5975 area. 5975 area acted as resistance which may act as support now. Break of 5975 area on closing basis will favor bears.
  • Nifty went above 23.6% and 38.2% fib levels with ease. Price is showing good upward momentum. 
  • We may get a gap up opening which may take nifty closer to 50% level. So if Nifty crosses 6014 levels then 6000 to 6020 level should act as good support or base for the next up move.
  • Second chart shows good support near 100 DMA. This up move if end at 50 DMA will be a classic retest of an important DMA which may be followed by big correction. If 50 DMA is taken out we may see 6200 in December.
  • S&P 500 EOD ANALYSIS
  • S&P 500 Gave a breakout and closed the day above 1200
  • Index was trading in a range of 1172 - 1200 for a while now. With price closing above the psychological mark of 1200 chances of resuming the up trend has increased.
  • Price should stay above 1200 in the following days.
  • Price has broken above 20 DMA which was acting as resistance. Price tested 50 DMA which has acted as good support for the index.

Disclaimer

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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