Today on Jan 22, 2010 Nifty has finally breached the major trend line support, where it had stopped yesterday after breaking out from wedge pattern. It took support at the low from where it started its final rally, which is also the close of the previous hammer candlestick pattern. Hence, 4943 was a crucial support which market did hold. Now, going ahead, 5170 remains a very strong resistance in the medium term and 5130 a strong resistance in the short term. Nifty has also posted a negative weekly close with strong volumes on futures and options front--one of the indicators that the index has begun its next move down.
In nutshell, the bounce if any will not be sustainable and hence should be used for going short. On the daily chart, Nifty is trading below its 20 daily moving average (DMA) and 40 daily exponential moving average (DEMA) i.e. 5211 and 5134 respectively, which are resistances in the near term. The momentum indicator (KST) has given negative crossover and is below the zero line. The market breadth was badly negative with 313 advances and 1,021 declines on the NSE and 842 advances and 2,043 declines on the BSE.
On the hourly chart, Nifty is trading below its 20 hourly moving average (HMA) and 40HMA i.e. 5214 and 5221 respectively, which are now the resistances in the short term. The momentum indicator (KST) has given positive crossover but is trading below the zero line.
Tuesday, January 26, 2010
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