Om namo bhagavathe sree ramakrishnaya
Hello all. Happy new year 2009( sorry for the delay). As I was busy with some family matters could not keep posting in blog. My sincere apologies for the same.
With Satyam episode, the nifty crashed and fell like the proverbial nine pins. If I am not mistaken, Satyam will not be in Nifty and Sensex starting 12th Of January 2009. With the help of technical analysis, let us try to examine and see what the charts foretold regarding market behavior.
Let us examine the spot nifty chart.
On 17-12-2008 Nifty touched the upper band of Bolinger, touching a high of 3076.20 and started it’s downward journey from upper band. The move started from one band will end at other band is the tenet. The Nifty touched the middle band on 26-12-08 and from 29-12-08 started towards upper band again. It touched the upper band again on 6-1-09 and on 7-1-09, the Satyam episode broke out.Hello all. Happy new year 2009( sorry for the delay). As I was busy with some family matters could not keep posting in blog. My sincere apologies for the same.
With Satyam episode, the nifty crashed and fell like the proverbial nine pins. If I am not mistaken, Satyam will not be in Nifty and Sensex starting 12th Of January 2009. With the help of technical analysis, let us try to examine and see what the charts foretold regarding market behavior.
Let us examine the spot nifty chart.
On 12-12-08, the Money flow index started it’s downward journey from over bought level, and breached the 80 line on 16-12-08 thereby very clearly indicating that the market is in over bought area. The money started flowing out of market is clearly indicated by that.
The R-squared which shows the strength of the move started the downward journey on 19-12-08 and kept on going down clearly indicating there is no strength in the subsequent move. The R-squared never crossed the critical level during the short term upswing.
Let us examine some over bought over sold area indicators.
On 22-12-08, the nifty made a top outside the upper band of envolps, which is clear indication of over bought area.
On 2-1-09, nifty touched upper band of projection band which generally acts as over bought area.
Based on the above, it is very clear that Technicals have given an indication that the market likely to react well before the satyam episode.
On 17-12-2008 Nifty touched the upper band of Bolinger, touching a high of 3076.20 and started it’s downward journey from upper band. The move started from one band will end at other band is the tenet. The Nifty touched the middle band on 26-12-08 and from 29-12-08 started towards upper band again. It touched the upper band again on 6-1-09 and on 7-1-09, the Satyam episode broke out.
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