January 10, 2011

  • Weekly chart of EURUSD with Fibonacci levels
  • The golden ratio of 61.8% is at 1.2785
  • Previous low on weekly chart is 1.2586
  • Long trades are possible from these levels.

  • SPY is in a range of 126.15 to 127.86
  • Recent fall took support at 126.15 so further correction will be possible only if 126.15 is broken on a closing basis.
  • Things will look positive for bulls if price starts to trade above 127.01 again.
  • Channel of ES in four hour chart has given a negative price action.
  • Bulls has to close above 1263.50 for continuing the up move again.
  • If price continue to trade below 1260 ES will start to drift lower.
  • Immediate Support levels are 1257 and 1255.50

  • Support line mentioned below has been violated.
  • Nifty Futures 4 hour time frame with 200 period moving average and the trend line support.
  • Nifty Futures does get support below the 200 period moving average in four hour time frame.
  • So if NF has to go down more it should break the trend line shown in this time frame. Twice we had good up move from this trend line So it may happen again. 
  • One has to be cautious while going long because counter trend trades are the most riskiest so keep a tight stop loss. If the trend line breaks one should get out of the long trade.
  • In the weekly chart nifty's previous resistance levels did gave support to nifty when it fell last time followed by a bearish engulfing pattern in weekly chart. This time nifty has finished a bearish engulfing pattern in weekly chart again, So will the support line shown in weekly chart be held, only time can give the answer. But seeing the ease at which price broke below 50 DMA things are favouring bears for a larger correction. 
  • There is a possible triangle pattern in daily chart shown in the second chart If the support line of that pattern is held Correction will be small. If the support line gets broken on closing basis price may test the 200 DMA.
  • MACD and Stochastic are looking negative. Stochastic in daily has not yet reached the oversold region. MACD just gave a negative cross.


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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