NIFTY Weekly price action analysis – 15-July-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 15-July_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) Shown hammer formation on weekly candle indicating emergence of buying at lower level

2) Though week has closed in red, but volume are lower then previous week i.e. selling is not supported by volume.

Bearish reasons -
1) Price is below previous weeks range.

2) We have bearish weekly bar after a narrow range doji weekly bar. It could be sign of reversal.

3) Price has come below previous Swing high (5604 )which was broken 2 weeks back. It is also trading below previous support level of 5639.

Interpretation and possibilities for next week -

As per last weeks analysis, we were prepared for a break below the low of previous weeks range to indicate us bearish development.

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 5900-6000 level is still intact (no change). This weeks bar had made higher high but it got rejected at highs and price came back to previous weeks range. If next bar moves up, then it might be able to test this supply zone. New trading range has developed between 5610 and 5710.

2) If new supply comes in at the resistance zone of Downtrend line, we might see price coming back below Swing high at 5602 that it broke recently and made new lower low.

Important levels to watch for – For up-move – 5650, 5740, 5900, For down-move – 5500, 5430. For sideway – 5650, 5500.

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.

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