Nifty Index updated on 03 July 06

As usual, first the disclaimer: This is not trading advise. To view the full sized pictures, right click on the thumbnail and open in a new window.

After the spine tingling excitement of the last fortnight, today was a rather ho-hum kind of day.

The movement was upwards biased, but the gut wrenching intraday volatility was thankfully missing. As a result, the volumes were quite low. The momentum of the Nifty’s movement towards the upside is also slowing.

Apart from my usual price chart with the fib levels, I am also uploading my regular hourly chart, which is based on indicators devised by me. I take cues from this chart to get an overview of the market. On the hourly chart, we have not seen any weakness as yet. The oscillators and indicators are both pointing to the market being overbought for the short term. That does not mean, that we go out and short the market tomorrow. As a trader, I would await a confirmation and then only close my longs. I would short the market only on the breaking of lower support levels.

As of now, it does seem that the Nifty still has steam for another 50 to 100 points upward, in this round.

Traders must decide their time frame to approach this market. Those among us, who make repeated attempts to “catch” the top, are sure to lose money.

It does seem that the Nifty is hammering away at the red supply line overhead. And since the supply line is rising, it seems positive for the Index.

Since the present trend is still up, stay long, till the Nifty breaks some important support level to the downside. The support level must be decided by traders, depending on the time frame in which they are looking at the market. I would again repeat, as abundant caution, please do not try and attempt to short what seems to be a peak.