Nifty Analysis for 27 July 06

Disclaimer: These are my personal musings and only meant for entertainment, not as trading advise. To view the full chart, right click on the thumbnail and open in a new window.

As was expected, the bullish run continued.

There was a minor hiccup during the day, but not enough to unnerve traders. The real test would now begin, where the Index will retest its earlier resistance zone.

And as is said in Technical Analysis, “till evidence to the contrary, the previous trend is assumed to continue”. Since the previous short term trend is bullish, we could continue to keep approaching the market with the same stance.

We also notice that earlier, the bears have been quite successful at the 3200 zone. Will they be beaten this time? It seems unlikely that they are going to give up easily.

However, if we step back and notice the forest rather than the trees, the weekly chart suggests a large bullish candle, for this week ending today. Therefore, we could assume that this time around the bears could be overwhelmed by the bulls.