Sunday, March 27, 2011

Game Changer Levels for Nifty

It becomes easy to follow 'Levels only' which are the result of corelation of some Technical Analysis methods. Here are a couple of them to help in Swing or Positional trading for Nifty in the Short Term.

1. Close below 5510 :

5510 has been the Weekly High Volume node for the last week ,which was overcome in trading. It is still the Highest Vol. node in 10 day Volume Profile. Any close below it will confirm the Bearish reversal in the short term. A move below 5470 ( breakout region and HV node in 5d chart and previous imp. level ) will confirm the onset of the 5th down. The Targets of which will be discussed at confirmation.

2. Close above 5752 :

Refer the EW post -   Click Here,   shows a preferred count of the corrective 'A' wave travelling in five waves down and we are in the 4th wave. As per hard EW rules wave 4th cannot enter the wave 1 region. Though on trading basis ,5690 is the level of invalidation, but to be on confirmatory side it is the 5752 level on closing basis. 

The Preferred count of the 4th wave results from  Channel pattern shown below ,having top line resistance near 5700+ levels . Similarly the next chart shows the importance of 5750 level which was a previous support may turn a resistance. 

Invalidation of this count will open the targets for the B wave up ,refer to the Alternate count in the EW post linked above. The Fibo targets of apprx. 5900 will also converge with the Trendline drawn from 6338-6180 and 6100 with the apprx. target for the Channel break.

One may form a trading startegy to take advantage of Price action at these two Important levels to be on the right side of the Market and trade for Positional gains.  

Trading notes for this Week -

1. Keep an eye on the Hourly chart with triple emas (, and developing trendline now) which gave a good reversal trade confirmation with initial SAR of 5450 . Hourly ema's alignment may signal the end of the III rd wave of the C and trading in the IVth.

2. The Expiry of this Week may be above 5510 level. Option analysis and EW supports it as of now.

Bravehearts may write 5500 Puts when (& if ) trades near 5530-50 for this series with  strict s/l 5500 level . One may also look to buy 5600 Calls simultaneously with similar s/l and the risk of them expiring worthless . Don't attempt it on the last day of expiry.

3. 5700+ level may prove to be a good Resistance in short term . (The IVth wave of the 'C'  may trade between 5700+ and 5530. This may also be the larger trading range of the week.

4. Be prepared for a volatile Week ahead as the last close is at the highest level of this series and now the short positions ( though got covered in quantity on last day ) formed till last week and new longs formed above 5450  will slug it out , making it volatile for sure.

5. These levels of 5510 and 5752 closing basis may remain valid for this Week (and may be next Week too) ,till it gets resolved whether we will trade in B up or 5th/A down in the next series. 


manu said...

rv..hi ..
i hope we close abv 5752..
u hav invented new thing n ew..taking h/l than count 5698..

for the time it looks a sell ntra

mynac said...

Nifty heading towards 5900.I remember that just few days ago,we talked about the crossing of 200 DMA and then the cushion of 250-300 points later on to save 200 DMA after the rally.Let us see.

Rajib said...


Wish the world cup home ...