NIFTY Weekly price action analysis – 8-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 8-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) Price still trading above previous Swing high which was broken last week

Bearish reasons -
1) Price is near downtrendline, which will offer resistance.

2) We have got narrow range weekly bar. It is also a Doji bar (bar where open and close price are almost same).

3) Trading volume has fallen during this week

Interpretation and possibilities for next week -

As per last weeks analysis, we were prepared for a Narrow Range week (case 2) and thats what market has shown us.

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.

2) After big upmove of 520 points a week back, market has already taken a breather during this week. So it is time for expansion week. We should be watching for break of previous weeks range and be prepared to trade it.

3) 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 – 5740, 5900, For down-move – 5600, 5430. For sideway – 5745, 5435.

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