Good morning. Nifty ended on 14th August 2008 at 4430.70, there by loosing 98.80 points over previous week close.In my last week write up I mentioned that “This indicates that there is some more steam left in Nifty, with probable upside. The likely target may be 4698.48. When Nifty reaches this area, it is advisable to adopt wait and watch approach.”.
During the week under review the Nifty posted a high of 4649.89 short of 48.59 points than the envisaged target. Let us try to examine the likely behavior of Nifty for the next week with the help of few technical aspects. Let us examine the spot nifty daily chart.
The spot nifty went down on the last two trading days and met the short term moving average. For the first time during since 21/7/08 the short term moving average started drooping. The positive aspect is, it is still above the long term moving average and the long term moving average is trending up. Now the important point is, will this level of short term moving average act as support and hold?. If this level is breached next probable support area is likely to be the long term moving average which is placed as of now at 4274.11.
The inertia is rising and about to cross the zero line. Chande momentum oscillator just neared the over bought area of 50 and started trending down.
As we would see the bolinger bands started shrinking. This indicates a trend reversal. The Nifty was moving up. And one more interesting aspect is spot nifty started it’s downward journey from the upper band. Move started at one band will terminate at other band. The move now being started at the upper band is most likely to reach the middle band. For the immediate term it will reach the middle band.
Hence it may be presumed that Nifty after reaching 4394 levels which is the middle band value, most likely to bounce back see some upside, before resuming the downward journey.
Regards
Subrahmanyam
1 comment:
today is 25th aug...waiting for ur new post in the blog.....
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