NIFTY Weekly price action analysis – 23-September-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 analysis

NIFTY weekly price action analysis

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

Bullish reasons -

I am struggling to find bullish reasons on chart once again on this week. Except that the volume in this bearish week are lower then previous week, which show lack of bearish strength.

Bearish reasons -

Once again we had bearish week.

1) Price broke above previous NR week, just to indicate that it was false breakout. It the resistance zone 5170 and dropped from there.

2) We have a bearish engulfing candle that has engulfed the bullish price action of last 2 weeks. It is also wide range candle, indicating strength in bearish move.

3) Volume has been low in this week. It is important to watch the price action and volume as it reaches the previous swing low point 4720.

4) I have marked Green think link on this weeks chart to project the possible downside target for this leg. Of course it will not be straight line move and we will see some intermediate bounces. Possible levels where market might support are green lines at 4700 /4550 levels.

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 5170/5200 level worked during this week and pushed the market down from here. Market found some support above 5000 which is also broken later. Now 5000 levels will act as new supply zone

2) Possible support is at 4720 level. Any break of this, can easily take market to 4550 level on downside.

3) Volume has been low during this week indicating that new supply has not yet entered the market. I would like to watch it closely during next week. Else my view of short term accumulation by smart-money will be supported. My tracking of FII flows also giving the sign of short term bottom formation.

Important levels to watch for – For up-move – 5170/5300, For down-move – 4830, 4720. For sideway – 4830 to 5170.

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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