October 26, 2010

APPLE Hour in a triangle

  • Apple Hour is showing a descending triangle pattern.
  • Price is trading close to the apex of the pattern.
  • Breakout and close above the resistance line or below the support line may give good direction.
  • 311 on the upside and 306 on the way down are important levels to watch out for.

S&P 500 hour chart analysis

  • Price remaining above 1184.72 will favour the bulls to push price higher.
  • Price trading below this level will be negative.
  • Price has moved above the 50 hour moving average which should favour bulls. Hour chart is also showing a range of 1177.22 - 1196.14.

Shooting star of Dow Jones

  • The effect of shooting star was evident today. Dow jones spot fell below 10 DMA. But bulls managed to put up a good fight till now and bought it above 10 DMA.
  • But the effect of shooting star is still there. Only if price closes well into the shadow of yesterday's candle the bullishness can be sustained. 

Dow Jones futures before opening bell

  • Dow Jones Futures chart in 4 hour time frame.
  • This is a line chart which shows a support zone from 11030 - 11070.
  • Above this area bulls will be safe to go higher. If price closes below this are bears will become more active and will try to drag the price below 11000

S&P 500 futures before opening bell

  • The support line breaks. That makes the wedge invalid.
  • staying below the support line will be negative for the bulls.
  • S&P 500 Hour chart is showing a falling wedge pattern.
  • Falling wedge is bullish reversal pattern. But if the support line breaks the pattern will be invalid.
  • This wedge pattern will be effective if price breaks the support line and goes above the resistance area.

Nifty Futures hour chart Update

  • Nifty futures hour chart with 50 hour moving average.
  • Price is showing a negative break.
  • Break of 50 hour moving average will confirm the negative break down.
  • If 50 Hour moving average gives support bulls may try to break the upper boundary today.

Fibonacci Levels and Moving average

  • Nifty futures hour is trading near the 38.2% Fib retrace level.
  • Breakout or breakdown should take out levels like 23.6% or the way down is possible only on a break of the 50% level.
  • 2nd chart shows the position of 50 hour moving average. We have seen good intraday moves happening from this moving average. One can use this by combining with important support and resistance areas.

Nifty Futures Intraday update

  • Nifty futures breaking the resistance line will be positive.
  • But how much it moves will depend up on the momentum after the breakout. If it moves above 6150 region it will gain momentum.
  • Price may also test and break the support line too.

The line of attraction

  • Nifty Futures line of attraction. Price tries to move away and it gets pulled back to the line.
  • Its like a rocket trying to move out of earth's gravitational pull. So the solution is simple, generate enough thrust or momentum to escape the gravitational pull.
  • So if this continues like this we can expect to see a good directional move after the breakout. 

Nifty daily analysis

  • Nifty daily chart is showing a broadening top pattern.
  • Broadening pattern can breakout on any side.
  • The next chart shows nifty hanging on to the 20 day moving average. But the closing was followed by selling at higher levels that led to a candlestick formation which looks like a  shooting star with its long tail. Although the closing was above 20 DMA. The suggested level of 6127 was not conquered on closing basis.
  • If nifty closes below 20 DMA again we may see some more correction.

S&P 500 Analysis after closing bell

  • The daily Chart is showing a Shooting star candlestick pattern. If we consider it as a doji then it becomes the variation of the shooting star that is the Grave Stone Doji. Both are bearish when seen at the top of the trend.
  • Real weakness will be seen if the price starts trading below 10 dma and makes a successful close below this moving average. But a close below 10 dma will be viewed with suspicion by the bears because every time the bulls managed to come back from this level.
  • Lets see if the bears are able to follow up with their selling tomorrow.