Sunday, May 12, 2013

NIFTY MACRO AND MICRO ANALYSIS for week ending 17 May 13

as per 8 year monthly chart …nifty may trade between 6370  ><5404 . fib levels

Monthly candle is showing that it is in bull grip and no sign of weakness.

NIFTY_Monthly_11-05-2013

weekly chart is showing that situation is totally in bulls control . Last week’s large candle is showing about bulls strength. Nifty moved up and trading at another pivot and double top level at chart  . If double top will work then  nifty will reverse from here and may trade at 5453 in coming  weeks but if it will sustain here then after consolidation or in continuation it may move to 6250 …triple top level  .

Noticing divergence  in macd , RSI and momentum …indicators are not supporting up move …what is divergence ?

as mentioned in investopedia 

“When the price of an asset and an indicator, index or other related asset move in opposite directions. In technical analysis, traders make transaction decisions by identifying situations of divergence, where the price of a stock and a set of relevant indicators,  are moving in opposite directions.

In technical analysis, divergence is considered either positive or negative, both of which are signals of major shifts in the direction of the price. Positive divergence occurs when the price of a security makes a new low while the indicator starts to climb upward. Negative divergence happens when the price of the security makes a new high, but the indicator fails to do the same and instead closes lower than the previous high.

If we will  plan trades according to weekly chart… seeing divergence and pivots including double top level…next week to be dedicated to bears and expect profit booking at 6100 level in Nifty .

NIFTY_Weekly_11-05-2013



Daily nifty chart is showing that nifty momentum is slowly decreasing …smart money is going out money flow index fell from 92 to 77 …if money is going out from market, why market is moving up ?either  money flow index is not correct or nifty up move ….It is to be noted that at the end indicators will take the lead and bubble will burst …learn more about money flow index . A momentum indicator that is used to determine the conviction in a current trend by analyzing the price and volume of a given security. The MFI is used as a measure of the strength of money going in and out of a security and can be used to predict a trend reversal. The MFI is range-bound between 0 and 100 and is interpreted in a similar fashion as the RSI.

The money flow index is similar to the relative strength index (RSI). The fundamental difference is that the MFI also accounts for volume, whereas the RSI only incorporates price. Many traders watch for opportunities that arise when the MFI moves in the opposite direction as the price. This divergence can often be a leading indicator of a change in the current trend.

NIFTY_Daily_11-05-2013

Definition of ‘Double Top And Bottom’


Chart patterns in which the quote for the underlying investment moves in a similar pattern to the letter “W” (double bottom) or “M” (double top). Double top and bottom analysis is used in technical analysis to explain movements in a security or other investment, and can be used as part of a trading strategy to exploit recurring patterns. Double top and bottom patterns typically evolve over a longer period of time than a day, and do not always present an ideal visual of a pattern because the shifts in prices don’t necessarily resemble a clear “M” or “W”. When reviewing the chart pattern, it is important for investors to note that the peaks and troughs do not have to reach the same points in order for the “M” or “W” pattern to appear.

Conclusion

If nifty will trade and sustain above 6100 it may trade at  6175 -6250

if started trading below  6100  may slip to 6030  5950 ..

if  consolidated  then range will be 6070 to 6130  for full week.

Rest depend on you all.

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NIFTY MACRO AND MICRO ANALYSIS for week ending 17 May 13

1 comment:

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