October 20, 2011

  • SPY daily is stuck between 50 and 100 SMA. Attempts to break above 100 SMA is not succeeding. So price has to breakout or breakdown below these moving averages for a bigger direction to happen.
  • Indicator like stochastic has been in overbought region for some time now.
  • Attempts to close above daily cloud is not succeeding. Price has to close above it soon or else we may see a bigger fall from the current levels.
  • First chart is ES four hour time frame with 50 Period moving average. Today's fall has been stopped at 50 period SMA for now.
  • For bears 50 period SMA has to be broken followed by a breakdown from the range shown in second chart.
  • For bulls this dip towards 50 SMA is a good opportunity to buy. But bigger moves can happen only when this range gets resolved.
  • Nifty hour 50 and 20 Hour has given a bearish cross.
  • Pull backs from here may not sustain at higher levels.
  • The marked support levels may save bulls from deeper correction for the day.
  • First chart shows nifty near resistance level with 5 day high ema. When it approaches the resistance level and closes below 5 day high ema it often gives an easy short trade.
  • Next chart shows last few days price action happening above 50 day SMA. So major down move will happen only if this level is taken out. One can also add 20 SMA to this list.
  • Bulls in weekly chart are battling against the descending triangle support line and if they manage to move above 5170 then 20 Week SMA will act as resistance.
  • 50 Day SMA at 5005
  • 20 Day SMA at 4975
  • 20 Week SMA at 5216


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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