Sunday, May 3, 2009

Hi friends! I am back with my same old charts and levels. As I stated in earlier occasions that nothing have changed significantly on the short term charts and still it seems bulls will take it to the 3540-3570 levels to reevaluate the strength of the current trend. So till then there are very few things to do rather than waiting for the above stated level, and of course one can buy in a significant dip, but I'll seriously suggest to do it with very small quantity when it comes to buying.
Today I have attached Eod Nifty Future chart showing a tiredness on the upward momentum in Nifty. The daily RSI (14) has already created a clear Lower Top-Lower Bottom formation,though the price is yet to confirm the weakness. The lower top signifying a negative/bearish divergence and it can also be called a failure swing (hidden divergence with 2nd top below the overbought level).It is also indicating a advanced breakdown making a Lower Bottom. Though I am not a believer of indicators, but a rational use of these tools can bring some valuable information, specially where we are very near to a big pivotal/resistance zone. The EMA on the chart is exactly coincides with our price projection making it even more important. The exact level is 3566. And the third whammy comes when we get 200 SMA (chart not posted) on weekly chart hits the same level at 3569 once again. 3565-3570 is going to be big, quite big i guess. So to sum up for the coming session,

Support: 3427-32/3404/3364

Resistance: 3511/3542/3560-66-70

Note: Don't take heavy position on buy side from positional perspective.


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