Saturday, December 25, 2010

Market Direction: Technical Point of View

Its a long time since I did a study on purely technical analysis.Now, is a good time to focus on pure Technicals. Lets have a glance at e few charts below.

1. Lets look at at an indicator which Shail and I have did a study of. Its the difference between 5 DMA and 20 DMA of the Nifty. Right now it is in positive territory and touching the resistance line of the previous peaks. Any close above 6025 and this trend line gets broken upwards. A clear breakout.


2. The 50 DMA is at 6018. Have a look at the past record. Whenever it has been broken on the upside or downside, there has been a substantial move. This is the first time since the rally started in March 2009 that it is trying to make an up move after being resisted once. So, if we move convincingly above 6018, up we go else we are in for a major correction.



3. There is a cluster of supports around 5950. The 20 EMA, 50 EMA, 5 day low Ema. This values should be kept as strict stop losses on the lower side.


4. The Bollinger Band indicates a resistance around 6067 which was the previous top. This rally has been very slow and retracement has taken a longer time than the fall. All this makes the rally suspect.



5. In case of a fall, Gann fans indicate support around 5600 and resistance around 6600.


6. Considering Fibonacci levels, the resistances should be at 6047, 6070, 6106, 6215. Beyond 6215 we are going for new highs.

7. The daily stochs have given a sell signal. These are leading indicators. The correction can be up to 5950 or deeper levels.



Strategy in a nut shell, long above 6024 and short below 5950 levels. In between, just watch the fun.

12 comments:

  1. Very interesting charts, Nishit.

    ReplyDelete
  2. Hi

    I am Rashmi Singh, now started following your blog more actively.

    About 6 years back I had done technical analysis course in BSE Institute,now thinking of getting in touch with TA by your blog and may be, if time permits, by my own study. I just want a little help from you

    a) where to get amibroker? Does i need to pay for this or any free version is available? What you use- free or paid version?

    b)How to get intraday price data? how much it cost?

    I hope i am not disturbing you in your study.

    Pl help me

    Yours
    Rashmi
    Mumbai

    ReplyDelete
  3. Dear Rashmi,

    There are distributors who will sell the paid ami broker version to you. You can use chart nexus which is a free software tool for charting.

    Intra day price data, I do not know since I do not do intra day trades. You can always use yahoo finance or google finance for intra day price data.

    ReplyDelete
  4. Amibroker is free. Send me ur ID. I will sent u the cracked version.

    ReplyDelete
  5. we provide consultation on amibroker and metastock

    ReplyDelete
  6. Kindly send to me(infinitiassociates@yahoo.com)

    ReplyDelete
  7. hello,

    pls can u email amibroker free links to kenshah@gmail.com.

    Thnx in advance..

    merry xmas & a happy n profitable new year,

    Ken shah.

    ReplyDelete
  8. As i have some problem with yahoo id kindly send to mr.aathithya@gmail.com

    ReplyDelete
  9. Hi nishitji,could u kindly explain us how to calculate the nifty levels, updated in right bar

    ReplyDelete
  10. Its a combination of values, based on rsi reversal, emas, fibo levels

    ReplyDelete
  11. Hi NV,

    Wish You and Family a Very Happy and Prosperous New Year!

    ReplyDelete