Nifty Analysis: - What going in NIFTY?

It has been a complete 1 month we have expressed our views on the Nifty. Our eyes were continuously on the moments of Nifty. Following we have listed our observation in points: -

1. Nifty index consistently taking support near 200 EMA from the last one month, we have also witness Open Interest is coming down in this month but from last 2 days OI is increasing again.

2. Volume is also very good in frontline stocks like banking stocks, its positive thing ahead.



3. Most important, when Nifty started coming down from 5600, it has making lower tops with down trendline which is shown in figure.



this down trendline tested thrice & confirmed its importance.

When this down trendline breaks by Nifty at upperside direction, Nifty's next intermediate uptrend will continue.

4. By seeing Nifty chart with RSI, it’s clearly showing divergence with price from last 6 months, we can predict Nifty is gaining momentum



Since most of the things in the market moves on prediction we too hope by looking at the technical chart that in coming days Nifty will reach new heights.

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Nifty Analysis: - What do technical analysis says about NIFTY?

For the latest on Nifty I have considered three most important factors as follows which will give a clue where Nifty will go in the coming time.

1. FAN PRINCIPLE (Trendlines)

By using Fan principle trendlines, we can say that trend has definitely changed. When Nifty rallied & started coming back, it has taken support at 1st trendline but after some time it has finally broke this trendline & tested 2nd trendline. By seeing this, we can assume that this 1st trendline will be next resistance & 2nd trendline will be support. Fan principle says until 3rd trendline, no clear cut downtrend continues.

2.  FIBONACCI RETRACEMENT

We joined from where Nifty began its rally i.e. 4315 & 5630 & draw Fibonacci retracement. One can see that Nifty is at its previous rally's 38.2% retracement now; it needs to stay above this level to resume its rally to upward direction. Before that I want tell u that these retracements suggests the support & resistance for next move.

3. Moving Averages.

Moving averages is the most popular indicator among traders & it is very easy to find. Here I’m showing chart with 50 & 200 Exponential Moving averages. Many traders forecast their trading strategies by using EMA & there try different EMA like 20, 40, 50, 100, 200 etc. I believe that these two moving averages (50 & 200) are very important for medium to long term trading strategies.

Nifty is trading near 50 & 200 EMA now & I feel we will see new recent highs like 5900 if Nifty manages to stay above 5200 & built up some buying near this level.

By reading F&O data, we observe open interest increased significantly & bulls bears both are equally strong for now. Next coming few trading sessions will conform who will take control & define next directional move. So it is very clear that Nifty is at very crucial point & we must wait for 2-3 days to decide our trading strategy. (For safer side we can go long above 5300 or long at this level with strict stop loss below 5200 on closing basis.

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Technical Analysis for NIFTY on 30th Jan 2012

In yesterday's trade we saw some selling in Nifty with open interest decreased (it is quiet  normal to see open interest decreasing with selling, no need to worry) & PCR and other data still not showing weak trend yet. This is positive side for Nifty, let's see other side or we can say negative side below,

Nifty once again failed to cross 200 DMA, as per Bar chart analysis Nifty showing 123 reversal,

RSI coming down from overbought level, volume is higher than previous few days.

These are negative points & can take Nifty in down trend.

Technical Analysis is always based on If analysis, so we are doing the same

If Nifty manage to stay above 5040-5060, then Nifty will keep its up trend intact. if Nifty will pierce today's negativeness & close above 5135, an immediate short term up trend will continue till 5400.

It will be interesting to see what happens next....

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Buy Tata Motors

Buy Tata Motors above 164 with a Stop Loss of 158 for the Target of 172 and 185.

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Punj Lloyd - Technical analysis , NSE , BSE , futures

Buy Punj Llyod @ 72.20 with stop loss @71, target 75-77

Please do look at the below video which explain trends in technical analysis

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