Sunday, May 8, 2011

Technical Analysis for Nifty

Posting the Market Insight and Observations for trading Nifty in the coming Week.

1. The Daily chart is Oversold and looks ripe for a bounce . It also was trading  below the lower Bollinger Band and has come above it in last trading session. The Mid band of 20dma lies near apprx. 5765 .

But the Weekly charts are still in the Sell mode .Hence caution for the bounce and respect for the higher time frame. Observe how the close has been below the Mid B.B. and now can travel down to the lower B.B. near 5200 level ,if doesnt close above 5650 levels on Weekly basis.

2. The Trendlines and Moving Averages plotted on the chart shows how the Upper Trendline being mentioned in the previous posts regularly acted as a big Resistance.The Markets will always travel the Path of Least Resistance. If they cant go up after several bangings on the Trendline, they will have to go Down. The Trendline at bottom connecting the lows since 5177 has provided Support after a whipsaw.

The Prices are trading below both 50dma and 200dma. As mentioned in previous posts that they both are Long term moving avarages and are Bearishly aligned after the Death Cross ,making the Market structure weak. Now the 50dma at 5630 level and 200dma at 5750 will act as Resistance to any upmove.

3. The Prices are due to Retrace the recent Downmove ,The Fibonacci retrace levels act as good Pivot points and Price action near them tells the story. Look how the Moving averages of the 50,100,200dma are aligned near the Fibo. levels giving them extra importance. The zones marked near 5630, 5690 and 5750 will act as likely Resistance.

4. The 5d Volume Profile Chart shows a High Volume node near 5540 level . This level may be the likely SAR for near term trading. Support comes near 5520 and 5460 and Resistance near 5690 .

5. One can follow the Elliott wave Insight giving likely probabilities in short term in the Post - CLICK HERE .This is the basic count being followed .

6. An interesting Pattern looks like being formed ,The Rounding Top , but named 'TOPI' by me as it looks like a cap (and in Hindi 'Topi Pahnana' is a desi slang meaning - To trick someone. This topi looks tailored for the Bulls ). It has a target for 5350 and may reach there quickly. 

So , the Weekly trading startegy should have following points covered-

1. The SAR may be 5540 level with supports at 5520 and 5460.

2. Below 5460 its likely to target apprx. 5350.

3. Above 5540 , the immediate Resistances will be at apprx. 5630 and 5690 level. 

4. The zone of 5630-50 is a Resistance confluence zone and requires caution .

5. Above 5690 will give a shot at 200dma and test its Resistance.

Have a Profitable Week ahead !!! 

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ttthakur said...

Sir, As always, excellent analysis.
Wishing you the Best in Life and Markets!
Thanks and Regards,

AAR VEE said...

Thanks ttthakur ,

Keep sharing ur views and comments.
also it will be lot better to cut out the 'sir' part simple RV will do.

San said...

Beautiful analysis as always.

Prabakar said...


Great Technical exploration.
Really enjoyed your "TOPI". Let's see to whom(Bull/Bear) Market presents the TOPI :)

AAR VEE said...

Hi San ,
Nice to have u here.

I do follow ur Nifty posts regularly.They are very enlightening.


AAR VEE said...

Hi Prabakar,

Topi has already been tailored for the bulls ,just that its to be fitted to perfection. :))

U are doing nice with the OI stuff at JN but I find ur blog missing.Why so??

jagannathan said...

I like your dedication to the readers.Daily i read only JN,ojn2 and yours.I prey to God for a very good life to all of you

AAR VEE said...

@ jagannathan
Thanks for the kind words.Writing the analysis makes me see clarity ,brings responsibility and helps me trade.

Sujatha said...

hi aarvee

Hats off 2 ur analysis. As usual i am having one "useless" observation. :D

Hv u checked odd and even years from 1999 to till this year??!! time permits check it out for april and may in these years :) :) and post your reply. let me cross check with my work easily.


AAR VEE said...

Hi Sujatha,

Thanks ,

No observation is useless specially from u :).I know ur women instinct.

Will definitely check out the data but if u are having some lead ,mail me.Looks very useful.

Please read 'charting made easy',small book but wonderful.

Sujatha said...

Aarvee :) how come u r sooo broadmind??!! thanks. only sending mail. check after 15 mins. ofcourse my "observation" is not a thumb rule :P

Lakshmi said...

Dear Aarvee

Excellent analysis. Thank you for the same


AAR VEE said...

Thanks for dropping by and appreciating.

bizagra said...

Dear Aarvee, u still hopeful of 5630 and above that 5675??Thanks

AAR VEE said...

Hi bizagra,
Market doent cares what i hope for or expect.we know the technicals and should be prepared with a trading plan to use it.Whether one is wrong(use s/l,SAR) or right(stay with the trend) ,aim should be to mint money and reduce the loss ,save capital.Rest doent matters

Sujatha said...

Hi aarvee

another one i got "about february" digging for details. will get u back.
by the way hv u got any 'clue"??

still mkt is "grinding" :)


AAR VEE said...

Hi Sujatha,

I am 'clueless' as ever :)
Theory seems fine .checking out data.Request u to mail be the data(check earlier mail)

This grind may continue more,but as always the more the product is grinded ,the finer it will become.
'May' may give good results in last week .:))

Fire said...

@Hi Aarvee,

It seems to me that in the daily chart Nifty is making a bearish flag. Now from the chart of BN fut.,it seems a sharp upmove towards 11440 may take place as the c. Similarly Nifty may give a sharp rally of about 100 points towards 5550-60. And that would bring some negative divergences paving way for the next big down-leg. Actually, the BN chart shows a more clear wave structure. b completed at today's low.

Now these are my naturally dumb observations. :D

Your comments would be most helpful and enlightening.

Fire said...

As usual, I made a mistake. It should have been "5650-60". :P

Sujatha said...


You cluless?? :) then me??!! :D I don't want 2 "put my levels or views" as i am irregular nowadays.

My February view - still i hv not posted anything.. pending :) u escaped from my torture.

See this - In March - 9 consecutive days of rise, late april & early may 9 consecutive days of falls and now one perhaps could see nine consecutive days of flat and range bound markets???!! ha ha nifty knows
"i am in holiday schedule"??!! lolz

AAR VEE said...

Hi Fire,
Nice of u to share ur observations here.
As per me ,mentioned in post also,-
It may be down below 5460 for an irregular b for this 2nd/4th wave.
Cluster of resistances at 5635-5695.This wave will be complex.

As u say it may give a negative diversion there,but i try not to predict these things as its pure expectation and not TA.

As a trader we should get the levels from our TA and manage the positions.The methods of analysis may differ ,sometime I may get it right ,sometime else may.But the bottomline is to get profit out of it rather then be correct.
Even if i go wrong i should know the level of invalidation of my TA and change stance likewise.

AAR VEE said...


Very nice observations.This 9days or more of range bound trading is supported by wave theory also (mentioned in last post that it may take couple of weeks to resolve).
The theory says that normally correction takes more time than impluse.

I am on a 'forced holiday' due to this wave.Normally i dont trade the corrective wave.will re-enter in mid next week.:))