Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
UK Energy Firms Scamming Customers Out of Their Best Fixed Rate Gas Tariffs - 23rd Sep 21
Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Should School Children be Jabbed with Pfizer Covid-19 Vaccine To Foster Herd Immunity? - UK - 23rd Sep 21
HOW TO SAVE MONEY ON CAR INSURANCE - 23rd Sep 21
Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
Trading Crude Oil ETFs in Foreign Currencies: What to Focus On - 22nd Sep 21
URGENT - Crypto-trader event - 'Bitcoin... back to $65,000?' - 22nd Sep 21
Stock Market Time to Buy the Dip? - 22nd Sep 21
US Dollar Bears Are Fresh Out of Honey Pots - 22nd Sep 21
MetaTrader 5 Features Every Trader Should Know - 22nd Sep 21
Evergrande China's Lehman's Moment, Tip of the Ice Berg in Financial Crisis 2.0 - 21st Sep 21
The Fed Is Playing The Biggest Game Of Chicken In History - 21st Sep 21
Focus on Stock Market Short-term Cycle - 21st Sep 21
Lands End Cornwall In VR360 - UK Holidays, Staycations - 21st Sep 21
Stock Market FOMO Hits September CRASH Brick Wall - Dow Trend Forecast 2021 Review - 20th Sep 21
Two Huge, Overlooked Drains on Global Silver Supplies - 20th Sep 21
Gold gets hammered but Copper fails to seize the moment - 20th Sep 21
New arms race and nuclear risks could spell End to the Asian Century - 20th Sep 21
Stock Market FOMO Hits September Brick Wall - Dow Trend Forecast 2021 Review - 19th Sep 21
Dow Forecasting Neural Nets, Crossing the Rubicon With Three High Risk Chinese Tech Stocks - 18th Sep 21
If Post-1971 Monetary System Is Bad, Why Isn’t Gold Higher? - 18th Sep 21
Stock Market Shaking Off the Taper Blues - 18th Sep 21
So... This Happened! One Crypto Goes From "Little-Known" -to- "Top 10" in 6 Weeks - 18th Sep 21
Why a Financial Markets "Panic" May Be Just Around the Corner - 18th Sep 21
An Update on the End of College… and a New Way to Profit - 16th Sep 21
What Kind of Support and Services Can Your Accountant Provide? Your Main Questions Answered - 16th Sep 21
Consistent performance makes waste a good place to buy stocks - 16th Sep 21
Dow Stock Market Trend Forecasting Neural Nets Pattern Recognition - 15th Sep 21
Eurozone Impact on Gold: The ECB and the Phantom Taper - 15th Sep 21
Fed To Taper into Weakening Economy - 15th Sep 21
Gold Miners: Last of the Summer Wine - 15th Sep 21
How does product development affect a company’s market value? - 15th Sep 21
Types of Investment Property to Become Familiar with - 15th Sep 21
Is This the "Kiss of Death" for the Stocks Bull Market? - 14th Sep 21
Where Are the Stock Market Fireworks? - 14th Sep 21
Play-To-Earn Cryptocurrency Games Gain More and Is Set to Expand - 14th Sep 21
The CashFX TAP Platform - Catering to Bull Investors and Bear Investors Alike - 14th Sep 21
Why every serious investor should be focused on blockchain technology - 13th Sep 21
SPX Base Projection Reached – End of the Line? - 13th Sep 21
There are diverse ways to finance the purchase of a car - 13th Sep 21
6 Tips For Wise Investment - 13th Sep 21 - Mark_Adan

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Indian Stock Market Detailed Technical Analysis with Chart studies

Stock-Markets / India May 01, 2010 - 06:32 AM GMT

By: StocksBuddy

Stock-Markets

Best Financial Markets Analysis ArticleAs was expected, there were wild moves on both sides owing to Options expiration. Since largest OI was centered around 5200, Nifty hovered and closed pretty much near it. After trading in a very narrow range all of last week, it closed pretty much where it left the previous week. This shows the tug of war between bulls and bears. Neither sure which way to trade at the end of the day/week. In our last analysis though we stated that there is chance of Negative Divergence building up and that would be give us two things.


  • Confirmation that the trend down has started.
  • Good entry point for going short.

Looking at the chart below it does infact looks like we are still in the process of building that negative divergence. On the price chart we have clearly formed a down-ward trend/channel. Indicators though are mixed. Some looking good, while others implying a potential sell-off in the coming week(s). US markets closed at LOD (low of the day) and were clearly down big time on friday. This will definitely have a negative impact on Asia open on monday.

Technically Speaking:

Take a look at the Daily Nifty chart below.

The above chart uses TD Demark indicators extensively.

Positives:

  1. RSI still above 50
  2. Almost all of the TD* indicators circling back nicely to the upside.
  3. MACD may be in the process of creating a positive divergence.
  4. The best of all, Nifty managed to close above center BB line.
Negatives:
  1. We have demonstrated the importance of BB center line. Anything that trades below this line, is a potential short. After have crushed through this line a few days back, nifty is finding it difficult to move back above it. Extremely negative.
  2. RSI, which is one of the most important indicators, is clearly showing negative divergence.

Next Week:

Weekly nifty chart shows clear indecisiveness, may be it was due to options expiration. We may get more clarity in the coming week(s). Chart from this week is not really that "telling" and hence it is difficult to state which direction market will head next week. The chart below is the ratio chart of Indian VIX (Volatility index) to Nifty. This chart shows the correlation between Volatility and the moves in Nifty. The lower this chart, the higher the chances for Nifty to move up and vice-versa. This chart gives more clarity to the picture. As it is clearly an inverse to Nifty direction, it is full of positive divergences upon itself. Most importantly it is still above it's BB center line. MACD Histogram is positive. Unless market moves to the upside, this chart tells us that we will have much more pain for nifty to the dowside in the coming days/weeks.

Trades for Next week

If you have already initiated a short position, trade with strict SL. Not really a good idea to go long in the coming week since there is a chance of negative divergence developing up. It is better to wait until the dust settles down and nifty clearly tells us which way it is going to go. Yes, you may loose a few points early on, but there will be lot more that you can catch with more confidence. If we are unable to break above BB center line in the coming week, one can accumulate short positions as we go forward. Have a Wonderful Trading Week ahead.

Regards

IndianStockCharts.com Team

Disclaimer: At the time of this writing, neither the authors nor our team held any positions on any securities unless otherwise explicitly stated. All information above is only for educational purposes and you are responsible for your own actions.

http://www.StocksBuddy.com

India's No.1 Trading Community From the desk of StocksBuddy.com Analysts comes the above article. SB Analyst team comprises of experts from varied fields such as Technical Analysis, Fundamental Analysis, Macro-Micro Economics, World Affairs, Currency and much more. Apart from user contributions, our analysts post analysis on StocksBuddy.com on a regular basis. For more details, please visit us @ http://www.stocksbuddy.com/blogs

© 2010 Copyright StocksBuddy - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in