August 30, 2010

Dow Jones in a channel

  • Dow Jones is trending down in a channel in 10 minutes time frame.
  • The current down move may find support at 10040 levels. If 10040 level does not hold then the correction will be large.

S&P 500 Hourly Trading range

  • 20 Hour moving average broken and the index is moving towards the lower end of the range as discussed below.
  • S&P 500 may trade in a range of 1039 - 1065 for sometime to come.
  • Right now the index is resting at the 20 hour moving average and below 50 hour moving average.
  • If 20 hour moving average does not give support index may move to the lower end of the trading range.

Dow Jones futures before opening bell

  • If The white line in the channel breaks correction can extend to 9900 levels


  • Dow Jones futures has hit the resistance line and is going down.
  • It seems the resistance line is too hard to break for now. 
  • 10040 is a very important support zone. 

Nifty Futures Intraday Update

  • Nifty futures broke 5425 and is moving down to test the support line at the lower end of the range mentioned in the below chart.
  • NF may give a long trade from here. But one has to be careful, if 5396 breaks NF may correct further.
  • Nifty futures is showing a range of 5396 - 5461
  • 5425 is the mean. 5425 is the low point for today till now.
  • If 5425 breaks NF can slide to the lower end of the range.
  • If 5461 breaks NF will favour bulls.


  • Bears of reliance industries seems to be too strong.
  • Price continue to go down. Stock is trading below 50 DMA, 20DMA and even 5 day low and high ema's. It is consistently closing below these moving averages.
  • Since the stock is coming down after breaking a triangle, every rise will be faced with selling pressure as the stock is facing now. Break of 1007 was a great place to short. Again I suggested to go short at 958 in this POST, stock on friday made an intraday low of 946.
  •  Adding to this there are good trend lines have formed as overhead resistance. I have shown it in 2nd chart.
  • The only hope perhaps for the bulls is the positive divergence that's developing in daily chart which can negate all the negative things that i have mentioned above.

TATA STEEL analysis

  • TATA STEEL has been  down trend ever since it broke down from the big channel in its daily chart as i have shown in the first chart. And right now there is a continuation pattern developing here. Breakdown of 500 levels and a close below 500 will confirm that.
  • Stock is in a trading range of 449 to 553. Right now the stock is moving down within this range.
  • Since the stock is oversold the daily stochastic may give a buy signal by moving above 20% line, combine that with a short term trend line break in daily chart which may give a rally towards the top of the range. Those who are stuck in longs bought at the top of the range can use this to exit.
  • Stock will not be positive unless it breaks 553 convincingly.