NIFTY Weekly price action analysis – 19-August-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) Price is nearing the horizontal support line around 4725. It is also very close to the lower trend channel line.

2) In last 1 year, we have not seen more than 4 red weeks. This week was the 4th consecutive red week, hence odds are high that next week is going to be a green week.

3) Current weeks fall has been on low volume indicating no new sellers entering market at this level.

Bearish reasons -
1) Current week gave another wide range, red bar indicating absence of buying at this level.

2) Price passed through the possible demand zone. It indicates the strength of bearish sentiments and absence of bulls in the market.

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. This is likely to offer resistance as market moves up.

2) Latest demand zone of 4950-5000 level was broken. Next demand zone is around 4700 level. I have also marked new horizontal support from April-2011 swing low around 4700 level.

Important levels to watch for

For up-move – 5100-5200-5325. For down-move – 4800. 4700. For sideway – 4800 to 5100.

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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