NIFTY SHORT TERM AND LONG TERM VIEW

NIFTY WEEKLY CHART

As shown in above chart last Friday i.e. on 19/8/11 nifty has intraday  broken below 200 week sma (to be precise 4836), but finally closed above it.

One more interesting thing, if u can see as shown in above chart, on friday it managed to close above 38.2% retracement from low made in oct 2008. S o it looks like very short term bottom is in place and nifty may bounce back from here for few points (mostly up to 5000-5050), but remember this is only technical bounce and can be played by experts and which should be managed intraday according to technical set ups.

Also in above chart u can see that there are multiple supports around 4650-4700 level, so in next week you have to see for bullish reversal candle on daily time frame to play short term bounce if it comes. REMEMBER RIGHT NOW INTERMEDIATE AND LONG TERM TREND IS DOWN ONLY.

If it closes below 4650-4700 then the next level will be 50% retracement from oct 2008 low which is approx. at 4300.



In above chart u can see that whenever nifty has closed below 200 week sma it almost corrected 25-30%, so if it closes below 200 week sma it may correct up to 3700-4000 level which again comes near the target of  triangle break down as posted previously. Why 3700-4000, because this is the gap created after election result on 18/5/2009 and it has been said that eventually over time every gap gets filled. 25% correction from current level means 3600-3700 in store.

 The weekly trend line shown as above may also give support, which again comes around 4600-4700 level.

REMEMBER ALL THE LOWER TARGETS ARE VALID, UNLESS NIFTY STARTS TRADING ABOVE 5250, ONCE IT STARTS TRADING ABOVE 5200 WE HAVE TO LOOK FOR ALTERNATE SCENARIO.

ONE MORE INTERESTING VIEW IS THAT AS SHOWN IN THE MONTHLY CHART BELOW, IT WILL TRADE BETWEEN THE RESISTANCE LINE ABOVE AND SUPPORT LINE BELOW FOR NEXT FEW QUARTERS TO YEARS TO FORM ASCENDING TRIANGLE PATTERN WHICH LATER ON BREAKOUT ABOVE RESISTANCE LINE AND THE LONG TERM BULL MARKET WILL START AGAIN. THAT MEANS NEXT FEW QUARTERS TO YEARS WILL BE CONSOLIDATION PERIOD. IF THAT HAPPENS IT WILL BE BETTER FOR LONG TERM INVESTORS WHO ARE INVESTING VIA SIP ROUTE.

ASCENDING TRIANGLE FORMATION

 

FOLLOW UP NIFTY IN TRIANGLE AND POSSIBILITY OF NEW HIGH

 We are talking of triangle pattern since last few weeks, on 31 July it has been mentioned that ---
NIFTY IS TRADING IN TIGHT RANGE AND NEARING THE APEX OF TRIANGLE, SO IT MAY GO UP OR DOWN AND SINCE IT IS NEARING APEX CLEAR DIRECTION WILL B RESOLVED IN NEXT 3-4 WEEKS. See the link http://kolhapuritrader.blogspot.com/2011/07/nifty-still-in-triangle.html 
       Now if u see the chart given below it has broken down the support line in week ending on 5/8/11

NIFTY TRIANGLE

 So according to as explained in chart since the height of triangle is approx. 1300 points (6350-5050=1300), the target will be 5400-1300=4100, WHICH WILL BE MOST PROBABLY REACHED IN NEXT 13WEEKS FROM WEEK STARTING 8/8/11 I.E.MOST PROBABLY UP TO OCTOBER END. 

Now if you can see the chart below you can note that there is one more chart pattern of  DESCENDING TRIANGLE, which was broken down on 12/8/11 (weekly basis)

NIFTY DESCENDING TRIANGLE

 So as explained in chart the target will be 5200-1150=4050 (Height of triangle6350-5200=1150), MOST PROBABLY THIS WILL REACH WITHIN NEXT 20 WEEKS I.E. BY DECEMBER END.

Eventually it looks like at least in next 6-12 months it should reach the above mentioned target, and most probably fill the ELECTION GAP which was created in May 2009.

THE ABOVE TARGET WILL BE VALID TILL NIFTY TRADES BELOW 5200, IF IT STARTS TRADING ABOVE 5200 WE HAVE TO LOOK FOR ALTERNATE VIEW.

Now you must be thinking about what happened to the possibility of new high we have mentioned previously, but kindly note that we have mentioned clearly that----
 BUT SEEING LAST WEEK CLOSE WE ARE HAVING FEELING OF NIFTY WILL TAKE OUT THESE RESISTANCES WHICH WILL BE MAJOR BREAKOUT FOR NIFTY ( i.e. IT STARTS TRADING ABOVE 5940-50 )  AND POSSIBILITY OF MAKING NEW LIFE TIME HIGH IN THIS FINANCIAL YEAR. BUT THIS VIEW WILL CHANGE IF  ----
1) It breaks today's low of 5791.55
2) daily close below 5693.25
3) weekly close below 5177.70 
        All the three supports mentioned above are eventually broken down, so that view got negated.
The above view of life time high has been mentioned on 26/4/11 in this post http://kolhapuritrader.blogspot.com/2011/04/trding-game-of-probability.html

FOLLOW UP CNXIT

On 12 June we discussed various trading pattern here http://kolhapuritrader.blogspot.com/2011/06/trading-patterns.html . In this post it has been mentioned that if CNX IT CLOSES BELOW NECK LINE OF HEAD AND SHOULDER ON WEEKLY CLOSING BASIS IT WILL TARGET 5600, SEE THAT AT THAT TIME IT IS TRADING AROUND 6650.
       Now if u observe the chart given below, it closed below neckline in next week i.e. on 17/6/2011 AND SEE THE MAGIC LAST WEEK OUR TARGET OF 5600 REACHED.

 PLEASE NOTE THAT WHEN THIS PATTERN NOTED ON 12 JUNE THERE IS NO NEWS REGARDING US DE-RATING! ALWYAS REMEMBER FOLLOW THE CHARTS AND NEWS WILL FOLLOW LATERON!!!

THE NIFTY HAS BROKEN DOWN FROM TRIANGLE WE ARE TALKING SO MANY DAYS SO THE POSSIBILITY OF LIFE TIME HIGH IN THIS FINANCIAL YEAR THAT WE HAVE MENTIONED PREVIOUSLY IS VERY VERY REMOTE NOW AND IT WILL GO DOWN FURTHER, WE WILL MENTION THIS IN DETAIL LATER ON WHENEVER TIME PERMITS. 

FOLLOW UP DOJI AT SUPPORT LINE

Since today there is no gap up, now around spot nifty 5430 onÈ CAN BUY FOR TARGET OF 5475- 5500 WITH TODAYS LOW AS STOP LOSS

DOJI AT SUPPORT LINE

Today there is gap down and at the end of day doji formation at support line of the triangle we are talking from so many days.  If tomorrow there is gap up you may buy nifty safely for target of 5475-5500. But remember this is counter trend  since at present nifty is in down trend and this buy position can be taken with strict stop loss of today's low which is 5378.85. If tomorrow there is gap up intraday long also can be taken with opening low as strict stop loss.

NIFTY DAILY