July 27, 2010

Negative divergence in Dow Jones

  • There is a small negative divergence developing in Dow Jones
  • But the index is trading at 10600 area from where it went down to 9614.
  • So If the bulls are strong they have to break 10600 and should make a firm close above it, and then the negative divergence will vanish in no time.
  • So from here both trades are possible. wait for proper direction.

Reliance industries Ascending triangle

  • Reliance industries ascending triangle in daily chart.
  • Price is trading near the bottom trend line. Break down of the trend line can pull the stock down to 970 areas.
  • If the trend line gives support the stock can move above 1070 levels in the coming days.

Nifty daily chart analysis

  • The raising wedge in daily chart is still valid. the morning may get a minor gap up because of the U.S. markets.
  • But any drastic changes in RBI policy can bring the raising wedge in to action.
  • Nifty closed between 5 day high ema and low ema. 
  • But the index is still trading above its 20 day sma. and as long as it stays above the 20 sma bullish moves are possible.
  • I have also shown the weekly candle. Right now it looks weak but we have four more day's to go in the week and a move above 5450 can turn the candle to a positive one.
  • But staying below 5400 and 5350 will not be good news for the bulls.

S&P 500 Analysis after closing bell

  • S&P 500 index closed up 12.35 points or 1.12%.
  • Dow Jones closed up 100.81 points or 0.97%.
  • So both major indices making nearly a percentage gains.
  • The first chart in this post shows the S&P 500 closing above its 200 DMA. I was expecting a close below this average today. But bulls were too strong. 
  • The index has also closed at the 50% fib retrace levels of its recent fall from 1219 to 1010. So a successful close above this level tomorrow can take the index to 61.8% retrace levels in the coming days.

S&P 500 Trading near 200 DMA

  • S&P 500 is trading near its 200 DMA and it is trading below an important trend line.
  • So the index should face some resistance before it tries to break the 200 DMA.