December 16, 2010

  • First chart shows ES hour in a descending channel.
  • Price should sustain above 50 hour moving average and the black trend line for resuming the up trend. till then it is an easy sell on rise.
  • Second chart shows price struggling to stay above the cloud and 50 hour moving average. We had one such breakout attempt yesterday which was got sold off.
  • BAIDU GIVES A SELL FROM ITS DIAMOND PATTERN

CHART-II
  • Break of the resistance line has given a good trade.
CHART-I
  • Support line of this pattern needs to break for selling to gain momentum.
  • If NF gets support here or at the support line we may get an up move.
  • So Bulls may hang on till 5850 levels. Break of 5850 may give the next wave of selling.
CHART-II
  • Nifty Futures has violated the trend line in 30 minutes chart.
  • Support area of 5870 - 5885 is also broken.
CHART-I
  • Nifty Futures support levels are seen at 5870 - 5885 level. Hour closing below this will be negative for the bulls.
  • Bulls are safe above the trend line drawn in this 30 minutes chart. Dip below the trend line may give warning signals for the bulls.
  • Longs will gather momentum if NF breaks and sustains above 5910.
  • DIAMOND OF TATA STEEL
CHART-II
  • Tata Steel breaks the resistance line of the diamond pattern.
  • Next targets for the stock are 667 and 680 and 695.
  • Price should sustain above 667.
CHART-I

  • Tata Steel weekly chart is showing a diamond shaped consolidation pattern.
  • Diamonds are bearish pattern. But their are instances of good upside breakouts seen from diamond pattern.
  • So price action above 658 and 670 will favor bulls.
  • Bears have to wait for a bit longer as the levels are 615, 597 and 588. So things will favor bears on a break below 615.
  • Between 615 and 654 price will remain in a range. But this range will get smaller as price gets closer to the apex of the diamond pattern.
  • Nifty is struggling to close and sustain above 20 DMA.
  • Weekly chart is trading close to support and resistance lines. Price may give good direction from this consolidation in weekly chart.
HOUR CHART
DAILY CHART
  • S&P 500 Hour has closed below both its 20 and 50 hour moving average. So correction may continue till price manages to claw back above the 50 hour moving average.
  • Up trend is still intact in daily time frame. If the correction continues 1225 level may offer good support for the index.
  • Today's correction was followed by the shooting star candlestick formed on monday. Price never managed to close above the shooting star. CCI indicator showed negative divergence in daily time frame before today's correction.
  • NEGATIVE DIVERGENCE OF CCI WAS SHOWN IN THIS POST

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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