NIFTY Weekly price action analysis – 14-October-2011

This item was filled under [ Traders zone ]

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

Nifty weekly price action based analysis

Nifty weekly price action based analysis

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

Bullish reasons -
1) We have got a new pivot low confirmed at 4730.

2) Strong bullish bar with close at upper end.

3) Increase in volume with bullish price action.

Bearish reasons -
1) Price is still below the crucial resistance level of 5180 / 5200.

2) Long term price trend channel is still pointing down

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 of 5200 level to be watched closely in next week. Market has still not tested this level yet.

2) Possible support of 4720 level has worked in this week and gave us nice bounce. It resulted in Hammer candle. I would like to see higher volume and close in top 10% for a hammer.  As expected, we got higher volume this week and strong bullish candle closing in top 10%. This indicates the strength of 4720 support level.

3) Volume has increased this week. My view of short term accumulation by smart-money is turning out to be correct as prices are moving up with strong candle. It is still not bullish move but in a sideway range with short term bullish bias.

4) Lower swing low at 5200 level is still not broken. As this level is below the long term bullish trend line from March-2009 low, it confirms that the trend line is broken. In other words the Bull market that started from March-2009 low is over. The long term direction of market is down and the deciding trend line for this is the down sloping line starting from 6300 high made in Oct-2010.

Important levels to watch for – For up-move – 5150, 5200, For down-move – 4880, 4720. For sideway – 4880, 5150..

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.

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.

Be Sociable, Share!
You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Leave a Comment