Sunday, May 15, 2011

Technicals for the Next Week

It was a sideways kind of week with the Nifty registering a fall of 0.1 pc. The kind of movement suggests that it is a pause before the continuation of the fall. Let us look at a few technical parameters.

1. 5476 is a key support level for this month. The Markets hit 5472 and then bounced back. Keep a close on 5472. If it sustains below this level, one ca go short.

2. 5624 is the 200 EMA and 5754 is the 200 DMA. Longs only above 5624.

3. The biggest sign that this is a new impulsive downtrend for me is that it took 9 sessions to fall from 5912 to 5444. Its taken 6 sessions to reach a high of 5605 and we have not even retraced 38 pc of the fall. This makes it clear to me that this is a pause before further fall.

4. The Bollinger Bands are opening up indicating a further fall. The support currently comes at 5393.

5. The various channels are marked on the chart. 5451 is a key support breaking which the multi-month channel gets broken. The height of the channel is about 500 points which gives us a target of 4900-4950 points.

Longs on close above 5624. Shorts if sustains below 5472. In between go long at around 5510 with stop loss at 5472 and short at around 5600 with stop loss at 5624.
The range of about 130 points should break soon giving targets of 5750 or 5350 both key levels. One is the previous bottom and the other is the 200 MA. The Range for this expiry should 5350-5750.

No comments:

Post a Comment