Technical Analysis for Nifty

The above Picture was received in a forwarded mail asking to read the word in this picture. Try doing it. You may be able to read a word in it. Try focusing more ,You will find two words in it , 'Illusion' in Blue landscape and 'Optical' in the Yellow.

Similar is the reading of Charts , we tend to see what we believe. But trading it stubbornly can be harmful for the Capital , instead we try to objectively analyze and get some conclusions that should be traded with Flexibility.

1. Indicators :

Analyzing the Indicator signals in three time frames as in charts below , the Hourly , Daily and Weekly , we find that -

- Hourly gave a Positive Diversion and has reached the Overbought zone but the Prices made a lower High doing so . 

- Daily Indicator is just moving up from Oversold almost signalling a Buy. The Resistance comes at Mid Bollinger Band of 20dma at 4960 and Support at Lower B.B. at 4740 . 

- The Higher TF of Weekly is a clear Sell . The Support comes of Lower B.B. at 4650.

Ideally all the rallies may get sold into till a strong Weekly close happens on upside.


2. Trendlines and Patterns :

Nifty is trading in a Rangebound zone making Lower High Pivots between the Trendlines shown in the Chart below.

The Triangle Pattern got broken down in Daily charts and is now Trading in a Wedge Pattern .    

The break of Trendlines on either side will give a short trem Trending move.


3. Moving Averages :

The  5 Week ema chart is an interesting one and cuts the noise of the volatile rangebound Daily chart . It shows a clear three week Uptrend followed by a couple of weeks of rangebound movement which has turned to a downtrend in last three weeks . 

Now a close above 4950 will signal a short term reversal on the upside and a close below 4800 may signal further trending downside.


4. Volume Profile :

To fine tune the Levels in conjunction with Volumes ,

the 10d Volume Profile suggests a break of Range on a close above 4950 on Upside and that below 4850 for the Downside.


5. Elliott Wave Analysis :

Further to the Basic counts in the Long Term Post . The chart below shows two alternate counts in Blue and Red . Blue is preferable now and shows a likely start of subwave 3 of wave 5 ( of C-Y) .

The likely immediateTarget for it is 4450-4530 levels.The Preferable count gets invalidated on trade above 5035 Spot price .


Conclusions :

- 4850-4950 is a No Trade zone. 

- High Probability of a Breakout move above / below this Range.

- Bias remains Down till closes above 4950 .

- Above 4950 will target 5060 and then will try to fill the gap upto 5124.

- Below 4850 will target 4800 , 4740 , 4650 and 4530.

- Caution against a whipsaw of the range boundaries. ( say a trading /close above 4950 but back in range to break the lower end or viceversa ) 

- Markets might  just be holding out before the start of the Results season next week. 

The Analysis concludes that Bias is Down , but rather than Trading this Belief  blindly, it will be prudent to trade the Prices objectively.


Wanna try out once more . Try reading the word in the picture below . Got one ,  try again .

It has two words in it. ' Good ' in Black , enveloping 'Evil' in White .




Now on seeing the picture again it looks quite obvious , which always will be the case seeing the Charts in the hindsight .

Happy Trading !!!