February 18, 2012

  • First chart shows resistance at 1763 and the weekly channel resistance line which may act as resistance.
  • correction possible below 1704 or 23.6% Fib level. weekly candle falling below 20 Week SMA should give a bigger fall.
  • Price near golden ratio and the resistance line of a broadening pattern.
  • But one has to see that price is yet to show any weakness as can be seen from the 3rd chart. So its important to follow price during such moves to capture maximum points. Especially for those who are long from lower levels its better to have a rising support line or trailing support line and be in trade till they are stopped out. 
  • VIX is near resistance line. Breakout can give correction to nifty. Nifty need to close at least below 10 Day EMA for some weakness to set in. Till then its better to be with the trend.
  • Four hour chart and month chart shows resistance from 1365 to 1370 levels. Breakout above 1370 will add strength for this bullish move.

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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