January 31, 2011

  • Dow jones weekly chart shows a bearish candle at the top.
  • A bullish candle during this week may negate the bearishness of the previous candle.
  • But price has not retraced much yet. If price falls below last weeks candle we may see more bearish action.
  • 15 minutes is showing a continuation flag pattern.
  • Level for bulls to cross 11870 for a short term up move to happen
  • Break below 11800 will favour bears.
  • First chart is ES daily with important level at 1273.50.
  • Bulls are trying to stay above this level.
  • Hour chart shows 1285 as the golden ratio for the recent fall. Bulls getting back above this level may be able to retrace 100% of the fall.
  • Falling below 1273.50 again will favour bears.

  • Nifty futures has filled the morning gap
  • Now there is a broadening pattern developing in 5 minutes chart.
  • The resistance line of the broadening pattern has to be broken for further upside move to happen
  • Nifty Futures 5 minutes chart with support and resistance lines.
  • Morning gap is yet to be filled completely.
  • 5 minutes is trying to create a channel formation But may hit resistance.
  • A short term reversal can be seen if the gap is completely filled and price closing above it.
  • Breaking the support line showed in the above chart will favour bears and if today's low gets broken we may see 5350 soon.

  • Weekly chart of reliance industries shows a support at 901.
  • Break of this level on closing basis will be negative for the stock.
  • Next support is seen near 858 levels.
  • Resistance for the stock is at 950 levels which it broke recently.

  • CNX IT has been getting support just below its 50 day moving average.
  • One trend line in daily chart too has held well so far.
  • Now 50 DMA has broken again. If the trend line does not hold we may see some downside for major IT stocks and CNX -IT index.
  • If the trend line holds and price goes on to break the resistance line this up trend will continue.

  • Daily chart of Tata steel shown with an ascending broadening pattern.
  • Price is trading close to its support line and near 50 day moving average.
  • So Break of support line will push tata steel towards its 200 day moving average.
  • While getting support here and trading above 50 DMA will favour bulls in the short term.


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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