Sunday, April 3, 2011

Nifty Trading Analysis for Next Week

Nifty has shooted up from the recent lows whole of the last week and before. It is an important Week ahead to test the Supports and Price action there . Lets see what is in store for the next Week.

1. Indicators:

The Hourly Indicators are in the Neutral zone where as the Daily ones are quite Overbought but yet to give a confirmatory sell.

2. Volume Profile:

The 5d Profile shows 5830 and 5790 as High Volume Nodes. There seems to be profit booking near and above the 5800 levels.

3. Fibonacci Charts:

The total downmove from high of 6338 to low of 5177 is retracing up , the likely targets are near 5900 and 6100.

The recent upmove may retrace for a correction and test the supports . The likely supports are marked in the chart and price action near each will determine the quality of the correction.

4. Trendlines:

The Trendline in Daily chart may act as a resistance near 5900 and above level.

The Trendline in Hourly chart will help determine the support or the break of it will see a short term trend change.

5. Moving Averages:

The Larger trend is still Down where as the Short term trend is Up.

The importance of 5750 level as per recent price history and 200dma that may provide support now-

6. Option Data:

The Options analysis of the open interest shows a Support at 5700 and Resistance at 6000. But as these are early days in the April series this is an initial buildup which will show some confirmation next week.

7. FII Action:

The FII's have turned the tables for this recent upmove and are big buyers in the cash as well as derivative segement.

8. EW study:

The probable short term count is  Posted Here.

We may be in the c leg of the Larger B wave retracing the whole of the wave A . This c wave may be moving in three legs up where we may have ended the first up last week and see the second down the next week. The probability of another high later in this series is high.

The Weekly Trading Strategy  should keep following observations in sight  -

1. Check out the Resistance near the Daily chart Trendline which also is probable  fibo target of Wave B at apprx. 5900 levels.

2. Weakness if trades below 5800 level as per Volume Profile.

3. Important Support near 5750 levels as per Fibo charts and recent Price history.
Next supports will be near the breakout level of apprx. 5610 ,5625 level as per pattern break and Fibo chart .

4. This Week may end trading range bound in 5750-5950 for the larger part  and may test the support at 200dma at apprx. 5700 + level.

Caution and following the Price action at important levels given above will hold the key for the next week. 

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