NIFTY Weekly price action analysis – 12-August-2011

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Here is the Nifty weekly chart with trend lines, trend channel and swing points marked on it.

Nifty Price Action Analysis 12-Aug-2011

Nifty Price Action Analysis 12-Aug-2011

Let’s take a look at NIFTY’s weekly chart and do the analysis based on facts shown by price action-

Bullish reasons -
1) Market has found support in marked demand zone

2) Volume has increased.

3) Price has shown doji candle (where open and close are almost same) indicating indecision among the participants.

4) Tuesday was a nice bullish day with very higher volume, indicating buyers have appeared on the chart.

Bearish reasons -
1) Market is in grip of bears and downtrend is still continuing as this was also another red week.

2) Range of weekly bar has increased indicating increasing strength of bears.

3) Volume has been high during this week, which might challenge further down move and go for side/bounce in next week.

4) Long term trendline from Mar-2009 low has been broken in this week with wide bar price action. Going forward, this line with act as resistance for any move.

Interpretation and possibilities for next week -
As a trader, we have to be prepared to face anything that market throws on us. So lets see what might come in next week.
1) Nearest supply zone is around 5350-5400 level which was demand zone till 2 weeks back. This is likely to offer resistance as market moves up.

2) Latest demand zone is 4950-5000 level where market found support during this week and bounced up. I have marked new support line around 4700 level.

Important levels to watch for – For up-move – 5325-5475-5530. For down-move – 4950, 4800. For sideway – 5200, 4950.

Hope this analysis helps you in forming your own views on market. Feel free to drop your comments on the post. Let me know if you would like to see something more in the analysis.

Wishing you all Happy Independence Day.

Disclaimer – These are my views on the market and I could be wrong in reading it. Please use your own judgment and make sensible trading decision based on your own analysis.

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