NIFTY FIFTY

WEEKLY

Looks like intermediate term bottom is formed at 4720.

POSITIVE DIVERGENCE

The positive divergence (i.e. price making lower low while indicator making higher low) at the end of previous week (i.e. on 26/8/11) gave this whooping rally of 300-350 points in just 3 trading sessions on last week. REMEMBER, BEAR MARKET RALLIES ARE SHARP IN NATURE!

If the Friday's high (5113.7) is taken out then it will retest 5200 and try to fill upper gap 5230-5325, at the same time our trading system which is based on hourly time frame given sell signal on Friday so it looks like it will try to test 4800-4850 level once again.

So unless 5115 is not taken out upside is limited, at the same time recent low (4720) is not taken out downside is also limited. In short it will try to consolidate in next few days to weeks before taking any further direction.

Looking at Friday's close of European/ American market and today,s price at Asian market and sgx  nifty it looks like we will open at least 40-50 point gap down which is line with the sell given by our trading system on Friday.   

DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.