NIFTY Weekly price action analysis – 22-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 Chart 22-July-2011

NIFTY Weekly Chart 22-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) Nifty weekly closing is in Green.

2) Volume are still lower then previous week i.e. buying is not supported by volume. Infact monthly volume so far is also one of the lowest (as seen around Feb-2009 ).

Bearish reasons -
1) Nifty has shown Inside Bar this week i.e. the range was well within previous weeks range.

2) We got a completed swing high on weekly at 5740 level. 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 sideway week and that’s what we got this time. This doesn’t give any clue about the trend but just tells that market has paused and looking for next direction.  Weekly range was 112 points which makes it NR6 week. This is strong indication that expansion week of wide range is just around the corner.

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). New trading range has developed between 5650 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.

Current Weekly trend – Down

Important levels to watch for – For up-move – 5650, 5740, 5900, For down-move – 5500, 5430. For sideway – 5650, 5530.

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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